uh, excuse me, dark brandon is bringing back US chip manufacturing with the CHIPS act and that'll epically own China

There's a whole universe of petite bourgeois industrialists in the US making like one niche car part or quirky bird houses, and they really want the environment to be more conducive to reshoring so they can be competitive. Of course Republican :brainworms: prevent them from pushing reformist policies (like medicare for all, infrastructure spending, etc...) that would materially benefit the productive sector of capital in the US, and in economic terms they simply don't have the power of high finance and multi-national corporate capital. Their political advocacy tends to get shunted into the Chamber of Commerce and similar organizations which are completely dominated by big capital and send ivy league ideological stooges out to run local chapters and keep local petite bourgeois from recognizing that their interests fundamentally conflict with international finance capital and the imperial machine. It doesn't help that these PB are typically also part-time landlords and have 'diversified portfolios' invested in these other sectors. This further confuses their interests and prevents them from cohering into a unified political force.

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Basis points are the economicsy way of saying interest rates. 1 basis point = 0.01% rate hike. So 100 basis points = 1% rate hike.

I think it's mainly because when you talk about increases in percentages, it's unclear sometimes if you're talking about a 1% increase of something versus an increase by 1%. e.g. the difference between a 200% to 201% increase (adding 1%) or a 200 to 202 increase (a percentage increase of 1% of 200).

My understanding of the general situation is this, feel free to dunk on me if I'm drastically wrong:

Increasing interest rates is seen by orthodox liberal economic thinking as the way to decrease inflation. In reality, the two have an unclear relationship at best, but hey, there's a reason why the global economic system keeps breaking down over and over again - we're ruled by these idiots. In this case, however, the problem is that there isn't enough supply going into the economy, when usually it's a demand problem. If it's a demand problem, then making interest rates go up is meant to decrease demand. But if supply isn't going up, then you can raise rates all you want - you're pressing a button on a disconnected video game controller.

For us, increased interest rates mean higher chance of a recession, which is obviously bad for working people. Of cause, causing a recession is also a way of decreasing demand to the point where it matches supply - but that's like starving a population so enough people die so that a shitty crop harvest can support them, rather than trying to fix the crop harvest.

They hiking interest rate. Making borrowing harder.

Those advocating for a rate hike see the current inflation as a problem of too much demand. They argue that the fiscal stimulus was too big, increasing incomes and demand too much. But what we are dealing with is not demand-driven inflation in an overheating economy. The COVID crisis started as a supply-side crisis that severely disrupted production, causing massive layoffs and furloughs. Income and demand crashed. Relief checks partially restored income but the supply side is still shaky—with continuing supply chain disruptions, bottlenecks, and price-gouging. The war in Ukraine will intensify and prolong such problems.

...

Furthermore, the Fed has never managed to guide the economy to a soft landing with rate hikes. Many point to Fed Chairman Paul Volcker’s interest rate hikes in the 1970s — to 20 percent and beyond (and above 15 percent for a couple of years), but conveniently leave out what followed. The economy crashed into a deep recession, and a series of financial crises (the thrift crisis of the early 1980s, the developing nation debt crisis later in the 1980s, and the big bank crisis at the end of the 1980s) can all be traced to Volcker’s experiment. Chairman Alan Greenspan’s tightening in the early 1990s brought on a recession followed by our first jobless recovery, and his tightening in 2004 helped to bring on the global financial crisis in 2008 and another, even longer, jobless recovery.

The evidence shows that in high inflation periods—including the current one—the major contributors are rising rent as well as oil and food prices. None of these is particularly interest-sensitive. People do not usually borrow to buy fuel for their cars, purchase groceries, or pay rent. Indeed, raising rates can even be perverse: higher interest rates reduce home purchases as well as new home construction, meaning that those who might have bought houses have to compete for a limited supply of rentals—pushing up rents and fueling measured inflation.

We must find a better way to think about, and deal with, inflation. There is no one-size-fits-all approach to inflation control, but what is clear is that interest rates are a very imprecise tool for influencing prices. In the current circumstance, the more appropriate solution would be to work to alleviate supply-side constraints. That, however, requires much more work and intentionality than a stroke of a pen to change interest rates, which camouflages as action rather than the cop-out it has proven to be.

hell, here's the whole article

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countries cannot afford to trade in an expensive currency so they will seek alternatives