Volcker Group to “Raise Wages and Living Standards”

November 26, 2008

http://www.reuters.com/article/newsOne/idUSTRE4AP1E920081126

Former Federal Reserve Chairman Paul Volcker will chair a new economic advisory panel created by President-elect Barack Obama and designed to stabilize financial markets, the Wall Street Journal reported on Wednesday.

What caught my eye about this article was the following:

The panel will have several jobs, the paper said, including: helping design and implement programs to jump-start the economy; raising wages and living standards; and confronting the housing crisis.

This is the first time in a very long time I’ve heard anyone talk about “raising wages and living standards.”  Until now, the government has literally waged a war against such things.  The Federal Reserve has been positively paranoid about the possibility of rising wages adding to inflation.  In fact, it’s been one of the “benefits” of “free” trade that have been touted –  that the downward pressure on wages has helped to hold inflation in check.  Never mind that wages have fallen faster than the prices of imported goods or that falling incomes contributed to the foreclosure crisis.  Those are dirty little secrets that the government is too uncomfortable discussing. 

It’s just refreshing to hear that someone “gets it” – that rising wages and living standards go hand in hand and that we can’t just cost-cut our way to prosperity.  I know, I’m grasping for any signs of hope here, but at least we’re beginning to see signs at which we can grasp.