(ThyBlackMan.com) Senator Elizabeth Warren admonished the Federal Reserve (Fed), blaming Chairman Powell for Job losses, because of rising interest rates to control inflation. Here are some comments and facts stated by Senator Elizabeth Warren, on March 7, 2023, in a Senate hearing with Federal Reserve Chairman Jerome Powell. Listen to her points, as you watch the short, and informative video.
The Fed is mandated, by Congress, to “promote effectively the goals of maximum employment, stable prices and moderate long-term interest rates.” That means the Fed is charged with working in our best interest, the best interest of ALL professional, blue collar, and working-class Americans, everywhere – promoting full employment, while keeping prices of goods, and services in check, so our money goes further.
The Fed is in an interest rate hiking cycle, as it moves to bring inflation down to 2%. As high interest rates work their way through the economy, due to the Federal Reserve hiking rates, layoffs will inevitably happen, as stated by Senator Warren in the video, with Black Americans traditionally being the first worker group to feel the impact, when it comes to layoffs. There is no getting around that, and there is no disagreement, about that conclusion, simply because the objective of the Fed is to reduce inflation, through reducing consumer spending. That translates into layoffs (less professional, blue-collar, and working-class Americans working, means less spending). We can all agree with Senator Warren on the conclusion about layoffs.
Yet, it is Warren and Democrats, who are hurting and throwing American workers under the bus, by actively supporting an onerous policy of undercounting our Job rates. It is a vile scheme. You may wonder why Democrats are being singled out for the practice of manipulating our Job Rates. Well, research shows, it was Democrats, who rigged the system, 29 years ago, in 1994 during the Clinton administration. However, Republicans made use of, and took advantage of the Democratic Party’s rigged unemployment rate system, when it was politically profitable for them to do so, during their control of the Oval Office.
The real jobless rate for March is 6.7%, (U-6 rate) and not 3.5% (U-3 rate), Biden’s official rate. These numbers are pulled from the Table of Alternative Measures of Labor Underutilization, which was developed, as a result of a redesign of unemployment measurements done, in 1994. The end result of the redesign was a modification of how to calculate the number of idle workers, in our economy. Read the complete study yourself, at this link: (https://www.bls.gov/opub/mlr/1995/10/art3full.pdf ).
After such a vigorous study, you would think the Clinton administration, would adopt the most comprehensive rate, or rather, the U-6 category rate, (the 6.7% rate today), and present it, as our official unemployment rate. “They did not. Democrats just did not work in the best interest of professional, blue collar and working-class Americans.”
This was actually the beginning of our rigged unemployment rate policy, as every president after Clinton used the rigged system. Dr. Robert Reich, who was President Bill Clinton’s Secretary of Labor, in 1994, when the unemployment categories were adjusted, declared it was not the Clinton administration, who rigged the system, pushing forth the U-3 category rate, as being comprehensive, of our Job Situation.
Reich blames the Bureau of Labor Statistics (BLS) for U-3 becoming the Clinton administration’s official rate. With that said, in-house economists of the BLS conveyed, at the time, when the changes to the categories were done, it was the U-6 category rate that was declared to be the most comprehensive, which for March is 6.7%. On page 24, you will discover in the linked article, the conclusion of the economists; they stated, “This (U-6) is the most comprehensive of the new range of alternative measures…” of the rate of U.S. unemployment.
William Penn rightfully asserted, “Right is right, even if everyone is against it, and wrong is wrong, even if everyone is for it.” President Biden, and Vice President Harris promotion of undercounting our Job rates is wrong, no matter how many Democrats, and Democratic Party donors support it. The U-3 rate measures a narrow worker group and was clearly never meant to be presented to the nation, as being comprehensive of our Job situation.
So, we find ourselves facing a third Recession in 15 years with Biden, Harris, Warren, and the Democratic Party promoting, and supporting a dubious national rate of Joblessness. If Biden aligns his administration with economists and declare the REAL and (truthful) unemployment rate, of 6.7%, which will definitely increase in the coming months, as the nation’s Job rate, we would already be having a conversation about a plan to grow our economy, and new Jobs after the Fed halts raising rates.
This is the discussion or conversation; Senator Warren is saying we should be having. She asks the Federal Chairman about an economic plan, for the millions of Americans the Fed expects to put out of work. But she neglects to tell us, it is not the Fed’s responsibility to come up with a fiscal plan, as this is not their constitutional role, to create, and write legislation, or work up a spending plan to grow our economy, and Jobs. That job is constitutionally reserved to President Biden and Congress.
What the Democratic Party did in 1994, undercounting our Job rates, can be repurposed to achieve a soft landing, in these economically troubling, and challenging times. Here is a reality check, a 3.5% Job rate economy (Senator Warren’s and Democrats’ economy) is radically different from the REAL Job rate economy of 6.7%. Add that the real economy, is deteriorating, due to higher interest rates, and millions of economic immigrants crossing our borders, you have got the makings of a real mess.
The Tax Cut to Families with Children contributed to pulling us out of the Downturn, due to the Pandemic, and can be used again. However, Republicans don’t like, Families with Childrens, as recipients of a consumer tax cut, even though technically, the principle of giving consumers a tax cut, to grow the economy, and Jobs was shown and proven to work, as we found out during our economic recovery from the Covid 19 pandemic. Even “an ivy league college graduate,” can understand this, if you give a tax cut to the 70% (the consumer), who is powering your economy, you are going to get continual and long-term growth, and job creation through “NEW” spending, by the 70% (the consumer), who is powering, and growing your economy.
If Senator Elizabeth Warren is serious about working in the best interest of professional, blue collar, and working-class Americans, there is a compromise group of consumers, she can promote to both major political parties, as recipients of a coming tax cut. They can readily step into the gap and will be just as effective as Families with Children, when it comes to creating those 2,000,000 plus Jobs, that might be lost.
The age group, beginning at 55 plus years, are currently responsible for approximately 40% of consumer spending in our economy. Baby Boomers are the largest homogeneous population, within that group of consumers, and would be the logical and, idea tax cut recipients. They too will use and spend the money, based on their statistical track record of spending as indicated, by their spending rate, above. But to get to this point, we need politicians like Senator Elizabeth Warren to support accurate Jobless rate numbers. Clearly, the prosperity of this nation is wrapped up in her efforts to get at the truth. And when having found the truth, we need her to stand up and support the truth, with the same vigor, she admonished the Federal Reserve.
Staff Writer; James Davis
Mr. Davis is an expert, in Financial Analysis, and Social Dynamics. His column is about relating facts, and truth in an understandable, and usable way. Relating the facts, and the truth, in an understanding manner, is his Job #1. He is a graduate of Florida A. and M. University (FAMU), and a human rights activist. He was awarded the Governor Burns Scholarship to attend FAMU, and while at FAMU was awarded the Martin Luther King Scholarship. James Davis is the author of three books, among them, “The Fix This Time,” Boost Your Retirement Income! Simultaneously Create Jobs and Spur Economic Growth (https://www.amazon.com/dp/B00MI3PD2M). If you got understanding from this article, “The Fix This Time,” has to be your next stop. ENJOY. James can be reached through his blog @ https://thefixthistime.com.
Question? Comment? One may use this email address; MrDavis@ThyBlackMan.com.