Michael Hiltzik: Should we raise unemployment to fight inflation? No, we need to protect jobs no matter what
If economic history teaches us anything, it's that when times get tough, working men and women get targets painted on their back.
Current events give us a perfect illustration. The U.S. is at or close to full employment with an unemployment rate of a historically low 3.6%, but inflation has been rising. So the argument that the remedy to higher prices is higher joblessness is being heard more and more often.
The most distilled iteration of this argument comes from former Treasury Secretary Lawrence Summers, who put it this way in a June 20 speech in London, as reported by Bloomberg:
"We need five years of unemployment above 5% to contain inflation — in other words, we need two years of 7.5% unemployment or five years of 6% unemployment or one year of 10% unemployment."
Summers called these "numbers that are remarkably discouraging relative to the Fed Reserve view," which is
