It does not have to be.
It's hard to imagine that it was just over a year ago, in June, 2022, that the very same Lawrence Summers quoted here gave a speech at the London School of Economics, in which he said, referring to the Fed's need to raise interest rates, “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.” Fed Chair Powell chimed in. "I wish there were a painless way to do that," he said, referring to unemployment caused by interest rate hikes. "There isn't." During the current, apparently unending series of rate hikes, Powell has repeatedly claimed that interest rate hikes are necessary to cause greater unemployment and thus bring down inflation. Fortunately for American workers, this strategy didn't work. So, let's hear it for the workers, who once again defeated the forces of evil and who remain employed despite Summers' and Powell's best attempts to lay them off. And even if they can't afford a house or a car with the current, obscenely high interest rates, at least they have jobs! Happy Labor Day!
It is astounding Larry Summers has any credibility. Under his watch at the World Bank they gleefully financed industrial scale strip mining and deforestation in SE Asia, all in the name of “development”. He was a proponent of exporting trash from developed to developing economies to improve their balance of payments. His bluster last year wholly ignored what was going on in housing (40% of CPI), energy production and supply chain recovery. He only value may be as a contrarian indicator. If Larry’s dour, it’s time to buy.
"It does not have to be."
"Have to" implies that the relative level of wages (and we have poor/no indexes of wages) need to fall relative to price of goods to prevent unemployment. Sorry, I do not believe it.
I haven't finished reading yet but whilst I agree that " A paycheck is different than a handout".
However, a handout or social security or other forms of 'compensation' (another term I don't like) does not mean we are NOT being socially useful and socially productive.
So other forms of transfer are not a handout per se.
Finished reading: nothing else to add.
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