Read The Invisible Handcuffs of Capitalism: How Market Tyranny Stifles the Economy by Stunting Workers for Free Online Page A

twice a year before the House and Senate. Just imagine the uproar if anyone suggested that labor unions have the power to determine the course of the economy with virtually no oversight.
    In addition, all other things equal, high interest rates tend to redistribute wealth from the poor to the rich, because the rich as a whole are net lenders, while the poor are net borrowers. Even during the 1990s, a time when interest rates were low, over one-seventh of wage earners’ salaries went to pay interest on their loans. 19
    Business does not want the economy to slow down too much, since economic growth is ultimately necessary for a sustained expansion of profits. Therefore, when the Open Market Committee deems it appropriate, it once again expands the money supply in an attempt to increase the pace of economic growth, at least until the economy begins to run short of unemployment.
    Ideally, the Federal Reserve would like to maintain a Goldilocks economy, in which economic growth is just right—strong enough to increase profits, but slow enough to keep workers in check. When business is pleased with economic performance, the press portrays the chairman of the Federal Reserve Board as a hero. For example, the journalist Bob Woodward titled his book on Alan Greenspan,
Maestro
, as if the economy were his symphony orchestra. 20 After the economy fell apart on his watch, Greenspan’s reputation withered.
    The Hidden Procrusteanism of the Fed
     
    One thing is fairly certain: when business fears that the economy is beginning to grow fast enough that workers might feel confident in demanding better wages or working conditions, the Federal Reserve is sure to step in and tighten the money supply.
    Restrictive monetary policy does not operate in the open. One of the beauties of the monetary weapon is that few people make the connection between what the Open Market Committee decides and their own situation. Nobody seems to be responsible for the resulting hard economic times. How could the economy seem Procrustean when Procrustes is nowhere to be found? When the economy slows down, the boss can tell the workers, “Sorry, guys, but there’s nothing I can do. I would love to be able to comply with your demands, but business is not good.”
    Workers are likely to resent people who directly discipline them, such as a supervisor or even the boss of the whole operation. Few workers, however, will ever think to vent their anger at the faceless president of a branch of the Federal Reserve Bank or one of the equally unknown members of the Board of Governors. No wonder that conservatives often regard the Federal Reserve’s fight against inflation as one of the nation’s highest economic priorities.
    Insofar as discipline is concerned, the system works like a charm—at least for business interests. This game becomes even more effective because the Federal Reserve projects an image of standing above thepolitical fray. The Fed speaks in terms of its mandated responsibility to maintain long-run growth, minimize inflation, and promote price stability—all of which sounds reasonable—while ignoring that part of its mandate to create full employment.
    The Federal Reserve uses price stability as a code word for holding wages in check. Paul Volcker, former chairman of the Federal Reserve Board, was clear about this relationship: “In an economy like ours, with wages and salaries accounting for two-thirds of all costs, sustaining progress [in reducing inflation] will need to be reflected in the moderation of growth of nominal wages.” 21
    The targets of restrictive monetary policy do not include rising prices for assets, such as houses or stocks. Instead, rising asset prices are interpreted as signs of economic health, even though these prices may be the result of speculative excesses that will ultimately destabilize the economy. Nor are the multimillion-dollar salaries of executives a concern.
    When Richard Nixon was running for president in 1968, he