Treasury Secretary Steven Mnuchin may be rich, have an expensive degree, and have a beautiful wife, but perhaps he doesn’t grasp basic economics. When you have the former, does it really matter? Maybe if you’re in charge of the Treasury Department then yes.
Let’s lay down the groundwork first. In January, the average hourly wage figure advanced 0.5 percent, the biggest jump since 2009, prompting market jitters about rising inflation – thanks Federal Reserve.
But Mnuchin doesn’t want you to worry.
Speaking to reporters at the U.S. Mint in Philadelphia, the former CIO at Goldman Sachs suggested that there isn’t a link between consumer prices and wage inflation, according to Bloomberg.
Huh?
“There are a lot of ways to have the economy grow. You can have wage inflation and not necessarily have inflation concerns in general,” he told the press on a train to Philadelphia.
He also dismissed concerns about foreign investment in debt, tax cuts producing deficits, and rising energy prices.
What an interesting cat.
This is the second time he has gotten into trouble. Earlier this year, at the World Economic Forum in Davos, he hinted that the Trump administration may depress the U.S. dollar to boost exports. Commerce Secretary Wilbur Ross and President Donald Trump tried to do some damage control, blaming the media for mischaracterizing his remarks. But the damage had already been done: the U.S. Dollar Index plunged below 90.0.
Mnuchin is considered a smart guy. But then again he invested in “Jupiter Ascending.”
I teach these principles to all my classes when we learn basic entrepreneurship. All cost is passed on to the consumer including but not limited to materials, utilities, taxes, labor, regulations, shipping, workers compensation, health care and so much more. When a politician says we will tax corporations the corporations either pass on the cost, move to a nation or state with lower cots or go out of business because they can’y compete. It’s why many too big to fail corporations and banks like the regs. It drives out the smaller competitors. Big government IS big business. It’s why DC has the wealthiest city in the nation and how Lizzy Warren can afford the 43.6 million she spent on her senate seat. Econ 101.
I wish I could find a way to articulate the correlation between the devaluation of the dollar (what we term inflation as not to confuse) and the relatively constant value of commodities. Gas is in reality less costly than it was in 1965 in relation. Silver about the same in relation to the value of the dollar then and now. Much is actually less in relation to wages then but we pine for the old days. Fact is wages have not kept up because of the HUGE debt tax that we all pay. Like I say for many it’s too hard to get a grasp of it. It’s obvious if you look at “inflation” since 1971 what happened and why. Thanks tricky Dick! I love silver. At least it keeps it’s value.