November, 02 2022, 03:56pm EDT
Fed Hikes Interest Rates Despite Expert Warnings of More Economic Pain for Working People
WASHINGTON
Today, the Federal Open Markets Committee (FOMC), the Federal Reserve body which determines interest rates, announced a 75 basis points interest rate hike, the sixth increase in eight months, despite warnings from economic experts that doing so would cause a recession and cost as many as 3.2 million people their jobs by the end of 2023. A new analysis from government watchdog Accountable.US juxtaposes hawkish statements from FOMC leadership pushing for higher interest rates against warnings from a wide array of economic experts--including a United Nations body, two Nobel economists, former cabinet officials, and a former Federal Reserve economist-- who believe hiking interest rates too quickly could make inflation worse and further hurt working class Americans, all while doing little to address inflation drivers like corporate profiteering.
"A chorus of economic experts have warned hiking interest rates again is a recipe for millions of Americans receiving pink slips, yet the Fed has decided to triple down on what is not working," said Liz Zelnick, spokesperson for Accountable.US. "Throughout the pandemic, the Fed should have been acting as stewards of the fragile economic recovery but instead have prioritized demands from big banks, hedge funds and other Wall Street special interests at the great expense of average working families. If excessive interest rate hikes hasten the arrival of an otherwise avoidable recession, will the Fed take responsibility - or try to pass the buck as they keep making matters worse?"
Among Leading Economic Experts Warning of Consequences of Higher Interest Rates:
- The United Nations Conference On Trade And Development criticized the Federal Reserve and other central banks for seeking to reduce inflation through interest rate hikes despite the risk of a global recession, with a senior official suggesting it was "'a very dangerous approach.'"
- Former Federal Reserve Economist and Council of Economic Advisers Senior Economist Claudia Sahm said "it is inexcusable, bordering on dangerous for the Fed to be raising rates so aggressively," warning it would cause "great pain" without addressing longer-term economic issues.
- Joseph Stiglitz--a Nobel economist and former Council Of Economic Advisers Chairman--warned that hiking rates "'too high, too fast, too far'" would increase inflation in goods and housing, would make it "'more difficult'" to invest in inflation-driving supply chain stress, and that corporations would actually continue hiking prices against consumers amid rate increases.
- Nobel Economist Peter Diamond said of interest rate hikes, "'it seems to me the message is you go slow,'" warning that the Fed's economic models "'aren't as relevant as people are thinking'" and that economic expectations could "'spin out of control'" if the central bank hikes rates and fails to stem inflation.
Accountable.US is a nonpartisan watchdog that exposes corruption in public life and holds government officials and corporate special interests accountable by bringing their influence and misconduct to light. In doing so, we make way for policies that advance the interests of all Americans, not just the rich and powerful.
LATEST NEWS
'Argentina Stopped': Unions Hold Second General Strike Over Milei Austerity
"It is a day of resistance and demand," said trade groups that organized the action "in defense of democracy, labor rights, and the living wage."
May 10, 2024
Argentina's primary trade union federation on Thursday held another nationwide general strike, the second called since President Javier Milei, a far-right economist, took office in December and began pursuing sweeping austerity and deregulation.
The South American nation's unions organized the strike "in defense of democracy, labor rights, and the living wage," according to a statement from the General Confederation of Labor (CGT), the Argentine Workers' Central Union (CTA), and the Autonomous CTA.
"It is a day of resistance and demand," the groups said, blasting the Milei government's "brutal" attacks on labor rights, social security, public health, education, science, and "our cultural identity." The policies of austerity, say opponents, have disproportionately impacted working people and retirees.
The labor groups called out the government for promoting "dangerous policies for the privatization of public enterprises" and pushing for "a phenomenal transfer of resources to the most concentrated and privileged sectors of the economy."
CGT celebrated the 24-hour strike's success on Friday, declaring that "Argentina stopped," and sharing photos of sparsely populated roads, transit hubs, and other public spaces.
As the
Buenos Aires Timesreported:
In the nation's capital, streets were mostly empty, with very little public transport. Many schools and banks closed their doors while most shops were shuttered. Garbage was left uncollected.
Rail and port terminals were closed, while the industrial action forced the cancellation of hundreds of flights, leaving airports semi-deserted. Some buses—from firms that did not take part in the strike—were running in the morning, although with few passengers. Cars were circulating, but traffic levels were similar to that seen on weekends.
The port of Rosario, which exports 80% of the nation's agro-industrial production, was all but paralysed in the midst of its busiest season.
A spokesperson for Milei, Manuel Adorni, claimed the nationwide action was "an attack on the pocket and against the will of the people" by those "who have curtailed the progress of Argentines over the last 25 years," the newspaper noted.
Meanwhile, union leaders stressed that the strike was the result of "a government that only benefits the rich at the expense of the people, gives away natural resources, and seeks to eliminate workers' rights," as CTA secretary general Hugo Yasky put it.
As the action wound down Thursday, Yasky described it as a "display of dignity of the Argentine people" that sent "a strong message" to Milei's government as well as the International Monetary Fund "that intends to govern us" and the country's senators.
Argentina's Senate is now debating an "omnibus" bill that contains some of Milei's neoliberal economic policies—including making privatization easier—after the package was approved last week by the Chamber of Deputies, the lower congressional body.
Rubén Sobrero, general secretary of the Railway Union, signaled that more strikes could come if lawmakers continue to advance the president's policies, tellingThe Associated Press that "if there is no response within these 24 hours, we'll do another 36."
From Europe to North America, trade groups around the world expressed solidarity with Thursday's strike.
"Milei's policies have not tackled the decadence of the elites that he decries, instead he has delivered daily misery for millions of working people. Plummeting living standards, contracting production, and the collapse of purchasing power means some people cannot even afford to eat," said International Trade Union Confederation general secretary Luc Triangle in a statement.
Triangle noted that "the government is targeting the rights of the most vulnerable sectors of the population and key trade union rights, such as collective bargaining, that support greater fairness and equality in society, while threatening those who protest with police repression and criminalization."
"In this context, the work of the trade unions in Argentina is extraordinary. They have emerged as the main opposition to the government's dystopian agenda, uniting resistance and building a coalition in defense of workers' rights and broader democratic principles," he added. "The demands of the trade unions in Argentina for social justice, democracy, and equality are the demands of working people across the world. Their fight is our fight and that is why the global trade union movement stands with them."
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'Unhinged' Israeli Ambassador Literally Shreds UN Charter Ahead of Palestine Vote
"Shame on you," said Israeli Ambassador Gilad Erdan shortly before the U.N. General Assembly passed a resolution supporting full membership for Palestine.
May 10, 2024
Shortly before the United Nations General Assembly approved a resolution Friday supporting full U.N. membership for Palestine, Israel's ambassador took to the podium and put a prop copy of the U.N.'s founding document through a handheld paper shredder.
In a speech that one journalist described as "unhinged," Israeli Ambassador to the U.N. Gilad Erdan described Palestinians as "modern-day Nazis" and condemned the U.N. General Assembly for choosing to "reward" them with "rights and privileges."
"You are shredding the U.N. Charter with your own hands," Erdan said as he fed a small copy of the document through a miniature paper shredder. "Shame on you."
Watch:
Watch: Israeli ambassador to the UN @giladerdan1 used a paper shredder to shred the UN charter on the podium of the UN general assembly ahead of a vote that will give new privileges to the Palestinians at the UN pic.twitter.com/mWQ85c8uwK
— Barak Ravid (@BarakRavid) May 10, 2024
Erdan's bizarre performance came just before the U.N. General Assembly voted overwhelmingly in favor of a resolution urging the Security Council to reconsider Palestine's request to become a full U.N. member following a U.S. veto last month. Palestine is currently a nonmember observer state of the U.N.
The General Assembly voted by a margin of 143 to 9—with 25 abstentions—in support of the resolution. The nine countries that voted no were the United States, Israel, Argentina, Czechia, Hungary, Micronesia, Nauru, Palau, and Papua New Guinea.
In addition to backing its bid for full U.N. membership, the resolution gives Palestine "the right to introduce and co-sponsor proposals as well as amendments within the assembly," The Guardianreported.
Riyad Mansour, Palestine's permanent observer at the U.N., said ahead of Friday's vote that support for the resolution "is a vote for Palestinian existence."
"I stand before you as lives continue falling apart in the Gaza Strip," said Mansour, noting that "more than 35,000 Palestinians have been killed, 80,000 have been maimed, 2 million have been displaced, and everything has been destroyed" by Israeli forces over the past seven months.
"No words can capture what such loss and trauma signifies for Palestinians," Mansour added.
"The U.S. and Israel are isolated and the world is on the side of Palestine."
Trita Parsi, executive vice president of the Quincy Institute for Responsible Statecraft, called the U.N. General Assembly's passage of the resolution "an unprecedented move that shows once again how unbelievably isolated [U.S. President Joe] Biden has made the U.S."
In anticipation of Friday's vote, a group of Republican U.S. senators led by Sen. Mitt Romney (R-Utah) introduced legislation that would halt U.S. funding for any entity—including the U.N.—that gives Palestine "any status, rights, or privileges beyond observer status."
Current law requires the U.S. to "cut off funding to U.N. agencies that give full membership to a Palestinian state—which could mean a cutoff in dues and voluntary contributions to the U.N. from its largest contributor," The Associated Pressreported Friday.
Craig Mokhiber, a former U.N. official who resigned in October over the body's failure to act in the face of Israel's genocidal assault on Gaza, wrote that Friday's vote further shows that "the U.S. and Israel are isolated and the world is on the side of Palestine."
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'Sad What We Are Doing': Global CO2 Increase Sets New All-Time Record
"I'd make this the lead story in every paper and newscast on the planet," said Bill McKibben. "If we don't understand the depth of the climate crisis, we will not act in time."
May 10, 2024
The average monthly concentration of carbon dioxide in the atmosphere jumped by a record 4.7 parts per million between March 2023 and March 2024, according to new data from NOAA's Mauna Loa Observatory in Hawaii.
The spike, reported by the University of California, San Diego's Scripps Institution of Oceanography on Wednesday, reveals "the increasing pace of CO2 addition to the atmosphere by human activities," the university said.
"I'd make this the lead story in every paper and newscast on the planet," author and long-time climate activist Bill McKibbenwrote on social media in response to the news. "If we don't understand the depth of the climate crisis, we will not act in time."
"Human activity has caused CO2 to rocket upwards. It makes me sad more than anything. It's sad what we are doing."
Scientists have been tracking rising CO2 concentrations from Mauna Loa since 1958, and their upward trajectory has come to be known as the "Keeling Curve," named for Charles Keeling, who began the measurements. The curve has become an important symbol of the climate crisis—making visible how the burning of fossil fuels and the clearing of vegetation has released more and more CO2 into the atmosphere, where it traps heat from escaping into space and raises global temperatures.
For most of human history, concentrations have hovered around 280ppm, and the curve's first measurement put them at 313. Sixty-five years later, C02 concentrations averaged 419.3 ppm in 2023, a level not seen since 4.3 million years ago when sea levels were around 75 feet higher and parts of today's Arctic tundra were forests. As of Wednesday, the Keeling Curve reported a daily concentration of 426.72 ppm.
The record jump from March 2023 to March 2024 surpasses the last record jump of 4.1 ppm from June 2015 to June 2016.
"We sadly continue to break records in the CO2 rise rate," Ralph Keeling, Charles' son who now directs the Scripps CO2 Program, said. "The ultimate reason is continued global growth in the consumption of fossil fuels."
The record leaps from both 2015-2016 and 2023-2024 were also influenced by active El Niño events. The El Niño phenomenon increases atmospheric carbon dioxide because it leads to warmer, drier temperatures in the tropics, which decrease vegetation and encourage fires. Atmospheric CO2 levels tend to rise especially quickly toward the end of an El Niño cycle, and last March's CO2 levels were unusually low, leading to a larger gap in the 12-month period.
This year's rate of increase during the current El Niño is significantly larger than the one that took place in 2016. As Scripps explained:
The increase from February 2023 to February of this year was 4.0 ppm, compared to 3.7 for the 2016 El Niño. The increase from January 2023 to January of this year was 3.4 ppm, compared to 2.6 for the 2016 El Niño.
The growth rate from April 2023 to April 2024 dropped to 3.6 ppm, but taking into account the first four months of 2024, the growth rate is well above that for 2016. If this El Niño follows the pattern of the last El Niño, the world might experience a very high growth rate for several more months, Keeling said.
However, any regular climate variations such as El Niño events occur over the longer-term rise in both fossil fuel emissions and greenhouse gas levels.
"The rate of rise will almost certainly come down, but it is still rising and in order to stabilize the climate, you need CO2 level to be falling," Keeling toldThe Guardian. "Clearly, that isn't happening. Human activity has caused CO2 to rocket upwards. It makes me sad more than anything. It's sad what we are doing."
Jeff Goodell, author of The Heat Will Kill You First, wrote in response, "We're riding the Venus Express."
The record jump in CO2 concentrations comes as 2023 was the hottest year both on record and in around 100,000 years. Of the 12 months covered by the March 2023 to March 2024 period, 10 of them (June through March) were the hottest of that month on record.
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