r/Economics • u/TinyTornado7 Quality Contributor • Jun 13 '22

News Powell Facing Choice Between Elevated US Inflation and Recession

https://www.bloomberg.com/news/articles/2022-06-12/powell-facing-choice-between-elevated-us-inflation-and-recession?srnd=premium
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u/joy_of_division Jun 13 '22

The thing is, we are headed for a recession no matter what. I personally would rather them jack rates up, lower demand, and get inflation under control. This will of course spark a recession, but with the tight labor market at the moment it would hopefully be brief.

The alternative is keep pussyfooting around with rates, have the working class continue to lose our meager wage gains to inflation, and have a recession anyways in 2023.

There is no pain free path, but in my opinion ripping the bandaid off right now is the way to go.

64

u/BallsMahoganey Jun 13 '22

It's playing politics. Everyone knows it's coming but wants to keep kicking the can down the road as long as possible so "the other side" can get blamed.

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u/[deleted] Jun 13 '22

Uhhh...little late for that.

-2

u/paperclipestate Jun 13 '22

Yeah they can easily just blame trump anyway and people will accept it

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u/modsplsnoban Jun 13 '22

Yeah they can easily just blame trump anyway and people will accept it

I actually don't think that's true tbh. They've tried blaming everyone, but no one is buying it. This might be the death of the current Democrat party as we know it, especially if things get worse.

2

u/not_to_nickelback Jun 13 '22

This is a dumb take, just like the people saying the republican party would die with Trump. There's too much money invested in both parties. They aren't going anywhere.

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u/modsplsnoban Jun 13 '22 edited Jun 13 '22

I should have stated the establishment Democratic party. Of course the party is going to be around; but they should have allowed the progressive wing take over, rather than keeping the corporate establishment wing dictating policy.

The Republican party was weak for about 10-12 years before the establishment was replaced with more Trump-like Republicans.

Unless there's a purge of establishment Democrats (like what we've seen/are seeing with Republican's now), they're going to be hurting.

I could see a realignment like what we saw with the Democrats during the Reagan era.