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We don't need more unemployment

I’m sick and tired of hearing analysts, economists, corporate executives and those they’ve convinced claiming that we don’t have enough unemployment and need more to reduce inflation. It happens that one federal agency is charged with dealing with inflation, the Federal Reserve Bank. It can’t directly lower inflation or the costs of food, fuel or health care. It’s main tool is to slow the entire economy by raising interest rates – which throws people out of work in order to reduce demand for goods and services and force business to cut back. So following the Fed, analysts take the easy way and focus on the one solution that makes unemployment a deliberate policy.

So there’s a holiday present – make more people lose their jobs. How deeply imbued with the holiday spirit. How representative of the American way! Pardon me while I run to the bathroom and do some involuntary recycling.

Dumping people out of work means they won’t be a corporate responsibility; they’ll just be a public problem. If they lose their homes, we can send cops for them and offer them shelters or jail – neither of which they want – how ungrateful can people be who just wanted a job.

But the economists, analysts and corporate rulers say we have to throw people out or we’ll have inflation. They must be mindless, uneducated, and neither smart nor caring. Without a degree in economics, I can think of several – though I confess I’m not ignorant either – I’ve done some reading, taken some economics courses and remember what we’ve tried or considered before.

I like to focus my commentary on a single idea but the point of this commentary is precisely that there are lots of possible steps to help reduce the impact of inflation.

The most obvious, if temporary step, would be price controls. I remember a Republican president doing that and many American communities did that after the Revolution. There are disadvantages to price controls but they’d spread the problem more fairly than putting people out of work, and give us time to put other steps in play.

Tax policy could make an important difference in dealing both with prices and with fairness. An Excess Profits Tax could make companies think twice about raising prices. A reformulated income tax could make life easier for those who’re stressed by prices. Using the tax system to put a safety net under the majority of us could allow us to let the price system do its work - reducing demand for gas and oil while encouraging business to solve supply chain problems. And the combination could allow us to economize so that we’re even better off.

This president has suggested investment to ease supply chains but that became a political battle. What did pass and is now law is the Inflation Reduction Act which will help to reduce health care costs and make cheaper clean energy more available, although I think it will take a while before we all feel the impact.

A coherent set of steps to deal with inflation would have to run the gauntlet of Republican opposition. Republican leadership has vowed to prevent any Democratic president from doing anything that would prove popular or make Americans feel better. It’s a shame that the political battle has become that bitter and disloyal, but there are lots of cooler heads who must know better. There are better ways to bring inflation down, singly and in combination, than throwing people out of work.

Steve Gottlieb’s latest book is Unfit for Democracy: The Roberts Court and The Breakdown of American Politics. He is the Jay and Ruth Caplan Distinguished Professor Emeritus at Albany Law School, served on the New York Civil Liberties Union board, on the New York Advisory Committee to the U.S. Civil Rights Commission, and as a US Peace Corps Volunteer in Iran.

The views expressed by commentators are solely those of the authors. They do not necessarily reflect the views of this station or its management.

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