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As a card-carrying commie-pinko elite liberal media sissy, I know I ought to cheer the Federal Reserve’s Open Market Committee for its brave move to do nothing last week, a role usually reserved for Congress.

The Fed once again passed on raising the Federal Funds rate by a quarter of a point, prompting whole squads of economic gasbags to turn their bloviating dials up to “11,” which is the setting reserved for expressions of shock that the Greek economy is once again destined to destroy the world, and this time we really mean it.

Instead, inflation hawks decried the Fed’s obtuseness in failing to understand that unless rates rise, the tide of depression-fighting cash it unleashed earlier is destined to turn America into a hyper-inflated wasteland where the economy is conducted entirely in exchanges of Spam and cigarettes. Over on the namby-pamby side, my fellow travelers praised the Fed’s move as a thoughtful and patient stance because low interest rates will boost wages and hiring for struggling workers, legalize hemp and free Tibet.

They’re both wrong, of course. A measly quarter-point Fed rate hike now isn’t an economic lightsaber to slay inflation or a monetary prescription for peace, love and waterbeds. Instead, it’s a toddler car seat with a toy steering wheel: you can spin the daylights out of the thing, but it ain’t gonna change where the car’s headed.

An economy in ‘park’

Let’s start with inflation, and why the United States won’t turn into the new Weimar Republic. The Fed started cranking its cash machine more than seven years ago, ultimately dropping the Fed funds rate to zero, and all that cash has sloshed around the economy for a good while. Where has that left inflation? Long-run average inflation is about 2.5 percent. Right now, it’s at an annual rate of 0.2 percent. If inflation gets any lower, it’ll compete with Scott Walker’s poll numbers.

As for inflation returning to its runaway pace of the 1970s, all I can say is that inflation isn’t running anywhere. Inflation sits on the edge of its bed, getting a little light-headed when it bends down to tie its sneakers. Right now, inflation is seriously considering giving up mall-walking and switching to yoga. Tonight, inflation will flip through its yearbook and wistfully recall its glory days of running the four-minute mile and going to Fleetwood Mac concerts.

Likewise, the notion that extending low rates will raise workers’ wages is amusing, like dressing a cat in a tutu. Rates have been at 0 percent for six-and-a-half years, and wages have barely budged. And when they do, those jobs get converted to part time with no benefits, get moved to a nonunion plant in the former Confederacy or get sent to a factory in some far-off bulldozed rainforest, with the blame pinned on federal rules for compact fluorescent lightbulbs.

Right now, corporations are sitting on as much as $1.82 trillion in earnings, a mountain of cash huge enough to fund weddings for at least two Kardashians. Corporate executives primarily spend the earnings on buying back company stock to push up the share price and trigger their own bonuses. If they felt the least desire to toss a few coins to the peasants, they could do it with company cash, which gives them no reason to worry about what hypothetical interest rate they’d pay on money borrowed for, what is that thing called again? That thing my grandparents told me about, the one where the paychecks get bigger? Oh yeah, “a raise.”

Let ’em eat beans

The upshot is that the problems of a quarter-point rise in central bank rates don't amount to a hill of beans in this crazy, post-global economy, and anyone who thinks it does is talking through his made-in-China hat.

After six-and-a-half years, our historically low interest rates have accomplished what little they could, which was to keep the darkest days of the great recession from getting worse and possibly triggering a pay cut for bank CEOs. The Fed was the only government institution trying to fix things because, once stimulus spending ran its course, Congress refused to support the economy and embarked on a course of screaming for tax cuts and government shutdowns.

It’s been obvious for a while now that low rates aren’t going to encourage more spending by jumpy consumers afflicted with post-recession spending disorder and real wages that are lower than a decade ago. And it’s just as clear that businesses won’t open factories or go on a hiring binge because money they don’t need to borrow is cheap.

Raising the interest rate at this point is largely a symbolic move that won’t do much, other than to buoy the stock market for a day or two when investors choose to interpret the hike as proof the economy is back to normal.

It makes absolutely no difference whether the Fed raises rates at its October meeting or its December meeting, because the committee already missed its big chance. If the Fed had raised the rate sometime between Sept. 6 and Sept. 12, the hike would’ve landed right where it belongs — smack in the middle of National Waffle Week.

Brian O’Connor is author of “The $1,000 Challenge: How One Family Slashed Its Budget Without Moving Under a Bridge or Living on Government Cheese.”

boconnor@detroitnews.com

(313) 222-2145

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