Federal Reserve officials have been debating another interest rate hike and its possible timing. The minutes of the latest meeting in July indicate some policymakers insist they first need more evidence on the durability of the economy’s rebound before approving an increase.
I must admit that I’m a little confused about what additional evidence they could possibly need. Do you remember former Fed Chairman Ben Bernanke indicating in 2012 that interest rates would start rising when unemployment dropped below 6.5 percent? Well, according to the government, that rate now stands at 4.9 percent.
How can the economy possibly get any better when we supposedly have full employment? After all, if the economy were to improve any more, we wouldn’t have any workers to sustain growth. It looks to me like the Federal Reserve had better quickly raise interest rates just to slow down the incredible growth that we’re experiencing.
Pathetic Economic Picture
Every time I hear and read the Fed minutes, I can’t help thinking how they confirm that the economy is every bit as pathetic today as it has been for the past decade.
This dawdling continues to reinforce the fact that the 4.9 percent unemployment rate is nothing more than a political stunt to try to give our current administration some sort of positive legacy. In addition, it shows how the federal government uses “smoke and mirrors” analytics as it continues to attempt to convince everyone that the economy is getting stronger.
But there’s a bigger problem besides the fact that the Federal Reserve has been persuading the public and Congress that it has acted wisely. It has also convinced economists, financial analysts and news media around the world that our country has a thriving economy with full employment.
It is important to point out that, yes, we have full employment—if we lived in 1978. It’s also vital to remind everyone that it is literally impossible to have full employment without seeing pressure on the workforce and increases in wages. None of this is the case.
How can we possibly have full employment with so many regions of the U.S. seeing a contraction in manufacturing, retail sales stuck in an ice age, and a decline in productivity, business investment and business revenues, all while poverty is increasing? (I suppose some would argue that productivity is down because everyone is fat and happy, knowing they can’t be replaced because there are no workers waiting in the wings.)
Refusing to Identify Problems
To make matters worse, not only have the mainstream financial news media bought into this deception—as confirmed by the Federal Reserve—many voters are swallowing the notion that four more years of this incredible economy is going to be a good thing for America and the American people.
I have belabored the facts of the economy for years, only to reap frustration over few people acknowledging the truth. We need to do one of two things: One, we can accept this current economy as the “new normal” and that conditions are as good as they’re ever going to be for our children and grandchildren, or, two, we need to admit that the lies, deception and political spin are nothing more than a cover-up.
I find it ironic that we quickly admit that we can never win a war against radical Islam because we won’t identify the enemy. But how can we ever have a real economic recovery when we refuse to look at the reality of seven years of 2 percent growth, no wage growth, no discretionary income and no increase in labor participation in the workforce?
In other words, how can we have a recovering economy when we refuse to identify the problems?
Dan Celia is President and CEO of Financial Issues Stewardship Ministries, Inc., and host of the national syndicated radio talk program “Financial Issues,” heard daily on more than 600 stations across the country. To learn more, visit www.financialissues.org.