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A comment on Speech by Chair Powell on monetary policy and price stability. Parent comment

Re:Speech by Chair Powell on monetary policy and price stabi... by slg on Monday August 29, 2022 @01:07PM (#32640671)
Which I think makes the argument that the Fed might not be the right entity to fight this. Powell literally says in this speech that the Fed needs to weaken labor market conditions (4th paragraph) to strengthen labor market conditions (3rd paragraph). But if the goal is strong labor market conditions and he already notes "the labor market is particularly strong", what are we all doing here? Congress should probably be the one tasked with addressing supply side issues instead of the Fed because the demand side issues aren't actually a problem that needs solving.
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Re:Speech by Chair Powell on monetary policy and price stabi... by el_benhameen on Monday August 29, 2022 @01:41PM (#32641120)
I think the Fed would agree with you. Powell and Yellen before him have indicated that they think fiscal policy is a much better means of addressing some of the issues they’ve tried to deal with via monetary policy, but the Fed can actually act while congress generally refuses to do so (IRA aside).
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Re:Speech by Chair Powell on monetary policy and price stabi... by adolph on Monday August 29, 2022 @01:44PM (#32641157)
> Congress should probably be the one tasked with addressing supply side issues

Because the deficient supply of self licking ice cream cones?

https://en.wikipedia.org/wiki/Self-licking_ice_cream_cone

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Re:Speech by Chair Powell on monetary policy and price stabi... by throwaway894345 on Monday August 29, 2022 @01:42PM (#32641131)
"Strong labor market" is only part of the Fed's charter. The full mandate is:

> so as to promote effectively the goals of maximum employment, stable prices, and moderate long-term interest rates

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Re:Speech by Chair Powell on monetary policy and price stabi... by slg on Monday August 29, 2022 @01:59PM (#32641336)
But those goals are redundant because they all effectively mean keep inflation in check. According to Powell's own argument in the 3rd paragraph in this speech, keeping inflation in check is a goal because "without price stability, we will not achieve a sustained period of strong labor market conditions that benefit all."
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Re:Speech by Chair Powell on monetary policy and price stabi... by throwaway894345 on Monday August 29, 2022 @03:46PM (#32642657)
I'm not going to argue that these things are completely orthogonal, but as the current inflation crisis illustrates, we can have steep inflation and high labor participation (of course, sustaining that labor participation in the midst of steep inflation is infeasible, but most people aren't economically literate and even professional economists get it wrong with troubling frequency).
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