The Federal Reserve’s Artificial Recession

If we end up in a recession, will the benefits be worth the cost? That is perhaps the grandest, gravest question facing the American economy as it barrels toward what feels like an almost inevitable downturn. More companies are announcing layoffs. Hiring is slowing. Home prices are falling. Forecasters put the odds of a full-on contraction in the next year at 60 to 96 percent, with one statistical model spitting out a probability of 100 percent.

This coming recession, if it does come, will largely be an artifact of policy, with a handful of unelected bureaucrats based in Washington choosing to increase unemployment and bankrupt businesses in order to cool off the country’s high inflation rates. To get the price of milk and gas under control for everyone, the argument goes, some people might need to lose their jobs.

“We’re never going to say that there are too many people working, but the real point is this: inflation. What we hear from. “If we want to set ourselves up, really light the way to another period of a very strong labor market, we have got to get inflation behind us. I wish there were a painless way to do that. There isn’t.”