As we assess the benefits and costs of alternative policy approaches, though, we must not lose sight of the daunting economic challenges that confront our nation. The stagnation of the labor market in particular is a grave concern not only because of the enormous suffering and waste of human talent it entails, but also because persistently high levels of unemployment will wreak structural damage on our economy that could last for many years. – Ben Bernanke, Jackson Hole
The Global Macro Monitor believes the benefits of money drops and quantitative easing, which helps generate asset inflation (though on a diminishing scale) are not equitable and accrue mainly to those who own the most assets, the 1 percent. Furthermore, it hurts those who least can afford the commodity inflation usually associated with the QE.
Sure, as stock portfolios increase in value, people may feel wealthier and spend a few more bucks at, say, WalMart, who may, or may not hire more retail clerks. The BLS notes,
Retail salespersons and cashiers were the occupations with the highest employment in 2011.
Talk about trickle down economics!
The rapid technological advances, which are destroying jobs, have probably weakened the wealth effect and employment link, in our opinion. Think about the job security of a Starbucks cashier, for example, as payments technology advances:
This fall, Square will begin processing all credit and debit card transactions at Starbucks stores in the United States and eventually customers will be able to order a grande vanilla latte and charge it to their credit cards simply by saying their names. – NY Times
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