Why Inflation Will Accelerate
The Fed has created trillions out of thin air to boost the speculative wealth of Wall Street, but it can’t print experienced workers willing to work for low wages.
The Federal Reserve is reassuring us daily that inflation is temporary, but allow me to assure you that wage inflation is just getting started and will accelerate rapidly. As I noted yesterday, the Fed can create currency out of thin and funnel it to financiers, but the Fed can’t create experienced, motivated workers out of thin air or entrepreneurs with the chops to launch and sustain real-world enterprises.
Let’s start with a funny little thing called competition, which has been pushing wages down for the past 50 years. Globalization means you’re competing with every other worker on the planet for jobs in tradable goods and services, and mass immigration and relatively high birth rates means there have been more potential workers than secure jobs.
Competition for paid work has been wonderful for global corporations, whose profits have soared five-fold thanks to labor arbitrage, also known as offshoring, where companies can pick and choose locales with the lowest cost labor.
There’s also been fierce competition for campaign contributions, as the cost of securing re-election has soared into the millions or tens of millions for congressional seats, and the bottom 90% can’t compete with the top 0.1% in terms of lavishing millions on politicians who have become keenly attuned to the “needs” of their corporate handlers.
Thanks to global labor arbitrage and the outright purchase of our pay-to-play political system, capital has skimmed $50 trillion from labor over the past 45 years. It’s all quantified in the RAND Corporation’s 2020 report Trends i
Article from LewRockwell