Thursday, June 15, 2006

Is unemployment good for the poor?

This article doesn't mention that inflation that includes increases in salaries helps many poor people because it decreases the relative value of their debts. Of course, the poor (and middle-classed) have not been getting an income benefit from the good economy we keep being told is occurring. The Fed's strategy for holding down inflation is to increase interest rates, which slows down the economy, causing job loss, so that there is less demand for goods. And of course it's the poor and middle-classed who suffer the job losses. I guess those who lose their jobs for the sake of inflation should be grateful; if you don't have a job, you really need prices held down!
Of course, the article also doesn't point out that those whose income derives from lending money (i.e., many of the rich) are hurt by inflation because it decreases the value of the debt they are owed.
This article looks to me like one of the common bits of propaganda that permeate supposed business news, whose purpose is to mislead people from seeing who things really work.

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