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Monetary policy should not shortchange the working class | READER COMMENTARY

Secretary of Labor Marty Walsh, center, visits the Frederick Douglass Memorial Bridge construction site together with District of Columbia Mayor Muriel Bowser and Secretary of Transportation Pete Buttigieg, in southeast Washington, D.C. on Wednesday, May 19, 2021. (AP Photo/Manuel Balce Ceneta)

The recent commentary on Federal Reserve policy contains anti-worker assumptions (”As the U.S. returns to normal, so must the Federal Reserve,” May 18). Michael Faulkender’s “normal” monetary policy favors a tiny wealthy elite who hold nearly all U.S. assets. Their use of these assets over the past four decades is a major source of working-class anger. We need capital investment, but greedy corporate czars give us stock buybacks.

He says “the recession was deep, [but] the feared depression did not materialize. Financial markets stabilized rapidly, and we … see new … highs across markets.” Here in the real world, we still have almost 6 million fewer employed people than were working in February of 2020.

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Mr. Faulkender suggests that monetary policy is permitting profligate fiscal policy and trots out deficit hawk mumbo-jumbo that has been proven wrong time after time. The issue with borrowing is not the fact of borrowing but what it is used for.

If the government borrows (from other nations and from rich people) to give rich people a tax break, and if the rich people use the money for luxury goods, to pad their Swiss bank accounts, and for asset-trading, then it harms the vast majority of us. Likewise, if the government borrows to build ballistic missiles that sit in silos unused for 40 years, then we’ve gained nothing in security or prosperity.

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But if the government uses the money to improve communication, transportation and education, to implement a more sustainable energy policy and to make the population healthier, then there will not likely be a problem paying the debt back because the economy will grow faster.

Mr. Faulkender tries to bully us into believing that the dollar’s status as a reserve currency is an important national accomplishment, which is threatened by government spending. Nobel-Prize-winning economist Joseph E. Stiglitz has thoroughly debunked this myth. The reserve currency status of the dollar makes it harder for the U.S. to export and harms workers. It’s fine for the wealthy, but it’s of no value to most people.

Let’s hear from some analysts who value the working person.

Charlie Cooper, Baltimore

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