Always a hoot to see Mr. Busler's erroneous analysis - though it is not ever really analysis- it is MAGAGOP propaganda. Let's dissect.
Economic growth:
Fed raised rates which " worked against the stimulative effects of the large across the board, tax cuts."
"The Trump Tax Cuts Led to Record-Low, Not High, Revenues Outside of a Recession"[1]
"researchers found the cuts delivered wage gains that were “an order of magnitude below” what Trump officials predicted: about $750 per worker per year on average over the long run, compared to promises of $4,000 to $9,000 per worker."[2]
And as usual, GOP policies help the wealthy while the GOP touts "trickle down" "The 2017 law changes disproportionately benefited the highest-income households."[3]
Busler decries that the "ountry had been mired in a 2% annual growth rut since 2008" and that the 2017 Trump tax cut fixed that. But tax cuts which were NOT really stimulative at all. [4]
The growth after the tax cut was a mere 2.95% - hardly the growth they insisted would follow. Trickle down always fails. Of course, Busler and his ilk, like his il Duce Trump have to always blame someone else for their failures.
Inflation:
Inflation did begin to creep up in 2021 [5] and peaked in June 2022, so kudos for some accuracy there! But Powell's concern wasn't just for inflation, but also for JOBS. [6] Readers may or may not know that the Federal Reserve has a dual mandate-
1. keep inflation to a manageable target (usually around 2% to facilitate growth) and
2. Work to keep the nation at full employment (generally considered to be 4% unemployment as "full employment").
Raising rates to combat inflation can have the effect of throwing people out of work. I personally think the US Govt should have a jobs guarantee which will flatten out the cycles of unemployment and thus flatten out the swings in demand which the FED has to combat because the cycles result in inflationary activity.
Labor:
"Labor has gotten and is still fighting for very large annual wage increases." Busler types this as if it is bad thing. But we know the GOP loves austerity and low wages. Can't let those workers earn the value of their labor! Wages have stagnated since the Reagan years when GOP neoliberal policies dominated. "Between 1979 and 2020, workers’ wages grew by 17.5% while productivity grew over three times as fast at 61.8%." So where did the value of that productivity go if it didn't go into the pockets of the people creating that value? It went to CEOs, stockholders and the wealthy. Since 1981 under GOP policies, we have seen the fastest wealth cap since the Gilded Age.[8]
Demand is inflationary:
Per Mr Busler when he says "cutting interest rates 50 basis points, all interest rates will fall and that could be problematic. The resulting increase in demand will pull prices up" uh okay. So spurring demand now could raise prices, but putting money into the economy with the 2017 tax cuts which were allegedly going to put $4000 into every household would NOT have been inflationary? Hey buddy, you can't have it both ways.
Final word for other readers-notice Mr Busler never, ever has citations to back up his assertions which are always GOP talking points. What Mr Busler is really afraid of with this screed is that the FED lowering rates will ease pressure on consumers, i.e. voters, and help Harris win the White House. He just won't say it out loud.
[1]
[2]
https://www.nytimes.com/2024/03/04/us/politics/trump-corporate-tax-cut.html
[3]
[4]
https://www.macrotrends.net/global-metrics/countries/USA/united-states/gdp-growth-rate
[5]
https://www.usinflationcalculator.com/inflation/historical-inflation-rates/
[6]
https://www.reuters.com/markets/us/feds-stages-inflation-grief-powells-words-2023-06-14/
[7]
https://www.cnbc.com/2022/07/19/heres-how-labor-dynamism-affects-wage-growth-in-america.html#:~:text=Wages%20in%20the%20U.S.%20have,fellow%20at%20the%20Manhattan%20Institute.
[8]
