The FED is After Us
Del Castle
Alan Greenspan, chairman of the Federal Reserve, has raised interest rates
again in what he calls the "fight against inflation." It is an
inflation which by reputable accounts does not exist. The rate increase to
"stop inflation" came on the same day the U.S. Labor Department
reported tame inflation for April and critics quickly assailed the Fed's move as
hurting consumers and small businesses.
"The Fed is flying blind on interest-rates policy, Senator Dorgan, D.-N.D.,
said. "Inflation is down, productivity is up. There is no excuse for
central bankers to impose another increase in interest costs on the American
people. Also, "there's very little real inflation", said Carl
Weinberg, chief economist at High Frequency Economics in Valhalla, N.Y.
And in the words of Greenspan himself quoted in the Seattle P.1., 5/1 5/00
"we are getting extraordinary productivity increases that are keeping unit
labor costs down." Therefore, according to Greenspan, if unit labor costs
increase inflation will follow. Thus, the Fed's real policy is low wage. Therein
lies a statement of the critical role labor plays in the economy as a whole. Low
wages means 1 1 0 months of stock market prosperity while wages have remained
largely stagnant.
The "problem" according to the Fed is low unemployment. With
unemployment lower than 5 percent, pressure for higher wage will inevitably
increase. Not only that, but the labor movement is finding new strength and
militancy and public support for higher rages. This is what is worrying the Fed.
So, to fight inflation in wages is the Fed's real but clearly under-stated
policy.
This could turn into recession, as has been noted by Daniel Laufenberg, chief
economist for American Express Advisors in Minneapolis. There is a danger that
the Fed will squeeze too hard and tip the economy into a recession, he is
reported as saying.
There is another consequence of the Fed's policy, never stated. That is, raising
interest rates will put more money into the pockets of bankers and other
financial barons. After all, the Federal Reserve was created to guard the
financial interests first and foremost. For that purpose the Federal Reserve
Bank was created as an independent agency beyond government or any democratic
control. Basically its sole concern is the health of the moneyed interests
regardless of the possibility of recession.
Expanded to the international
economic scene, this reminds us that the W.T.0., IMF, World Bank, etc. have the
same policy of protecting financial circles internationally at all costs.
Fortunately the people's of the world are now fighting against such a ruinous
international program. We should not let the Fed's "fight against
inflation" fool us! Actually it is a fight against higher wages and for
lower living standards all around to benefit the bankers and financial concerns
regardless of recessionary economic consequences. We need to fight the Fed's
"fight against inflation" for the welfare of the working class and the
country.
All of this may be summed up in a letter from a reader of the Seattle Times:
"Why is it called a booming economy when the rich people get richer
but we call it inflation when working people get raises?"
|
