Why FIFA Cannot Be Replaced Or Reformed

When the world’s central bankers meet this week in Jackson Hole, Wyo., the topic on the table will be how to foster a dynamic global economy. For America’s central bank, the Federal Reserve, the biggest problem is at home, not abroad, and its latest view on the economy, released last week, shows it may not have a handle on it.

As Fed officials try to make sense of how low unemployment, which should drive up wages and prices, persists side by side with low inflation, most simply assume that inflation will rise by next year as labor demand lifts wages and higher wages lead to rising prices. This belief has led to two interest rate increases so far this year, in effect tapping the brakes on growth to fight inflation, with another rate increase expected this year. A more plausible view is that persistently low inflation shows the economy is more fragile than policy makers want to admit, and needs to be helped, not handicapped.

Core inflation, which excludes volatile food and energy prices, has fallen short of the Fed’s 2 percent target every month for five years, and decent pay raises for most working people have been few and far between, even as unemployment has dropped by nearly half, to 4.3 percent. The Fed has had to continually pull back its inflation projections.

Another sign of weakness is that eight years into an economic expansion, the share of employed workers ages 25 to 54 is less than before the Great Recession.


Continue reading the main story

Much of this is beyond the Fed’s control. Among the barriers to employment are the rising use of opioids and dismal job prospects for people who have been arrested or imprisoned. Better drug treatment and health care, and sentencing reform, could help, but they are not within the Fed’s purview. The Fed also cannot create a plan to bolster jobs by rebuilding the nation’s infrastructure. Nor can it enact an immigration plan to compensate for an aging population and smaller labor force that can restrict economic growth.

Newsletter Sign Up

Continue reading the main story

Thank you for subscribing.

An error has occurred. Please try again later.

You are already subscribed to this email.

View all New York Times newsletters.

The Fed is also not responsible for advancing labor standards that help to lift wages. Republicans oppose a meaningful rise in the minimum wage, which was already inadequate when the current $7.25 hourly rate took effect in 2009. The Trump administration is undermining an Obama-era effort to lift middle-class pay by updating rules for paying time-and-a-half for overtime to salaried workers.

Trending Hairstyles

Source : https://www.nytimes.com/2017/08/22/opinion/fed-inflation-interest-rates-workers.html

Why Is the Fed So Scared of Inflation?
Why state-level single-payer health care efforts are doomed
Why FIFA cannot be replaced or reformed
Why Are So Many White Nationalists ‘Virulently Anti-LGBT’?
There is one big silver lining that comes with Trump’s troubles: Tax cut odds may be going UP
Under Trump Rule, Nursing Home Residents May Not Be Able To Sue After Abuse
Analysis: 5 ways tax reform could affect educators
Why GOP Congress will soldier on with Trump
Think Obamacare repeal was hard? Wait for tax reform
In push for ‘tax reform,’ wealthy conservative groups hope to avoid health debate’s mistakes. They may be repeating them.