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Comment by 7speter | Hacker News Reader

The fed’s job is to keep inflation under control, not to “engineer (a) financial crisis.” If the fed raises the interest rates and sinks us into a financial crisis, it was a mistake, as seen during the great depression.

If you want working class pay to go up, go vote for people who will help working class pay up instead of assigning conspiracy theories to the fed.

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I think OP was using "financial crisis" in a non-technical way and was referring to the Fed's targeted plan to leave an additional 1 million people unemployed by the end of the year.

If we assume this is what they meant, I think the post is reasonable. The fed is targeting labor in this way specifically to avoid a wage/price inflation spiral. Those hurt the most by such a spiral are capital holders as the relative power of their capital decreases.

(all this said, I would actually prefer solutions targeting the land-holding class, over labor and capital).

The fed does not have a “targeted plan to leave an additional 1 million people unemployed by the end of the year.” Please stop spreading such FUD.

I don't see how this is FUD. The fed is intentionally trying to "soften the labor market"[0], and one of the ways the intend to do that is to invoke policies that will increase unemployment to at >4%. Increased unemployment is a target of the current policies. The stated reason for this appears to be inflation control and particularly a wage-price inflation spiral[1], again, fixed with increased unemployment. I don't think any of this should be controversial from an economics or fiscal policy standpoint, this has been the playbook since stagflation in the 70s.

[0] https://www.federalreserve.gov/newsevents/speech/powell20220... [1] https://www.cbc.ca/news/business/wage-price-spiral-column-do...

The fed is not _trying_ to soften the labor market, it is trying to reduce inflation. It expects that the labor market may soften as a byproduct. It's right there in your link.

It won't be a mistake. The Fed will raise interest rates to tame inflation and will create unemployment by doing so. That will also cause a financial crisis, though. Every time the tide goes out we find out who was swimming around naked. This time isn't going to be any different.

It’s hardly a conspiracy theory. Pretty much everyone that has the ear of the FED has an investment portfolio and are going to be pushing positions that control costs in those portfolios, one of which is labor.

Are under the impression the Fed is an arm of the government? It is a private entity.

Weird comment.

I made it because the parent poster seemed to think it exists for the good of the public.

It’s a public private partnership, it runs privately but the federal government decides who is appointed to its leadership roles

You’re absolutely right. Which makes it perhaps the biggest conflict of interest in history.

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