To the Editor:
According to an Oct. 5 Forbes article “there were about 605,000 announced layoffs” in the first nine months of this year. That’s 605,000 hard-working Americans that had a torturous drive home wondering what they’re going to tell their families. We don’t know exactly how many of those are directly related to the 11 interest rate hikes by the Federal Reserve since March of last year but we know the intent was to slow the economy in order to get inflation under control. Unfortunately, the side effect is an increase in the unemployment rate. It’s been that way since the 1960s.
This cause-effect relationship is obvious to anyone who’s looked at a chart of the federal fund rate against the unemployment rate. With respect to getting inflation under control the only time prices go up is either when there’s not enough competition or when the government has restricted energy production. Both of which are the responsibility of our elected representatives – not the Federal Reserve Board. The CPI that determines the inflation rate is a deeply flawed measurement that assumes consumers are stupid and will buy overpriced items instead of substituting with lower priced items such as the store brand.
Interest rates should be determined purely by fierce competition between banks and how smart they invest. Future historians will scratch their heads wondering why we ever let a 12-member committee of a private entity have such a grip on the strongest economy in the world.
Ben Furleigh
Port Charlotte
