Looming railroad strike could cripple US economy

[Yo_Mama_Been_Loggin]

A major railroad strike is looming that could paralyze the nation's supply chain and transportation rail service if both sides don't come to an agreement by the end of the week.

Unions said workers are seeking improvements to working conditions, accusing rail companies of penalizing workers for taking time off for medical reasons. The unions said rail companies are jeopardizing the nation's economy to force a deal.

The National Carriers' Conference Committee (NCCC), which represents the nation's freight railroads in national collective bargaining, said rail employees are provided "significant" time off and that the companies have offered a fair contract that includes a significant wage increase.

While 9 unions have reached tentative agreements, ongoing negotiations with two holdouts could lead to a strike as early as 12:01 a.m. on Friday, as the cooling-off period under the Railway Labor Act ends and strikes become legal.

https://www.msn.com/en-us/news/us/looming-railroad-strike-could-cripple-us-economy/ar-AA11PRYo

[honest.abe]

1. Wonderful.. this and Feds raising interest rates.

Our economy is doomed.

[madville]

2. Higher interest rates are going to help us long term

It will take several years to cool down inflation.

[honest.abe]

5. I just dont get the idea of crashing the economy and putting millions out of work..

to lower the price of potatoes.

[madville]

6. Ideally it won't "crash"

It will hopefully be a slow slide down for just a couple of years before it rebounds again. Housing and rent prices alone justify a managed downturn to cool off those markets.

[honest.abe]

8. "Ideally"

I doubt they have any control on whether its ideally or not.

[madville]

9. The federal reserve only has that one tool

Politically the federal government doesn’t have the ability to do what would actually be necessary to fix things quickly, primarily raising taxes while simultaneously reducing existing spending. Neither side would allow the other to happen.

[honest.abe]

10. How about doing nothing?

[madville]

11. If they do nothing we get 10+% inflation

That’s far worse politically and for all consumers long term.

[honest.abe]

12. How do you know that??

[madville]

13. Basic economics

Every reputable economist agrees on the effects interest rates have on inflation, it’s pretty much universal.

[honest.abe]

14. I doubt "old school" basic economics works anymore.

We are in a new economic world run by Amazon, Facebook, Google, China etc.

If I was in charge I would let things go and see if interest rates really go that high.. then if they do then put the hammer down.

[NickB79]

15. That's what happened in the early 80's, and it wasn't good for the economy

My parents paid almost 14% for their farm mortgage when they bought it from my great uncle.

I can't even imagine owning a home at that rate.

[honest.abe]

16. That was 40 years ago.

I dont think the same economic rules apply,

[madville]

17. We better hope it still works

If not, people won’t be able to afford fuel, utilities, rent or food. Runaway inflation isn’t bad for everyone though, existing debtors see their liabilities get cheaper and owners of real property, real estate, collectibles, precious metals, eventually stocks, etc see their values increase exponentially. Basically the rich get richer and the poor get poorer.

[honest.abe]

18. We shall see. So far I would say its not working.

[madville]

19. It takes a few years

This will take a few years to sort out, it’s not instantaneous.

[honest.abe]

20. A few years??

I dont think we have a few years. Our economy is very fragile. Millions are on the edge of poverty, homelessness, and paycheck to paycheck survival. A policy of forcing a recession could send this country into a serious economic crisis.

[madville]

21. Nothing is getting fixed in a few months

They’ll hike rates a bit and see if inflation cools, if it doesn’t they’ll hike a bit more, if it starts trending down a bit they’ll stop raising them and see what happens, it’s a balancing act for sure.

[honest.abe]

22. I still think doing nothing would be the best approach.

But I guess I have to trust the economic geniuses that they know better.

[GoodRaisin]

35. It shouldn't take years, PPI is already beginning to decline. CPI lags behind

so we should start to see decline in consumer prices in a few more months and continuing over the next year. Unfortunately, not in time to help us in the election.

However, a major freight strike of any duration would reignite inflation regardless of Fed policy.

[WarGamer]

26. Mortgages just crossed 6%...

They'll be 7% by the end of the month...

I'd say 8-9% is where people just stop buying houses.

When demand for real estate dies, values drop. People who paid 850k for a house 6 months ago will walk away from their house when it's worth 650k... they'll just drop the keys in the mailbox at the bank...

This is 2008/9 all over again... but possibly worse.

[honest.abe]

27. And that's the solution??

I dont get it.

[WarGamer]

28. I think you meant to say "What's the solution"?

Not my pay grade.




But logic says that you don't euthanize your beautiful golden retriever puppy because he barks too much.

The Fed is running on the theory that "If too many people are comfortable and making ends meet, that's bad because our system requires XX% of the population willing to work for ANY WAGES and eat dirt and drink dirty water.

Our system relies on poverty to keep the system balanced.

Our system is the problem.

Smarter people can figure it out.

Do you know what Yellen said earlier this year?

"There have been unanticipated and large shocks to the economy that have boosted energy and food prices," Yellen told Blitzer. "And supply bottlenecks that affected our economy badly that I didn't, at the time, fully understand."




The Fed Reserve has pretty much 1-2 jobs... and they didn't see inflation coming? Funny, I was reading articles in the financial pages about inflation the last 2 years.

[honest.abe]

29. "don't euthanize your beautiful golden retriever puppy because he barks too much."

Yeah that's a good way to put it.

[madville]

32. Why would they walk away from a house

Just because the value fell? Their payment would still be the same regardless of the home’s value. They’d likely be better off keeping the $850,000 mortgage at say around 4% ($4,000) a month than trying to find a “cheaper” house at 8%, $550,000 at that rate would still be $4,000 a month.

I was stuck with a small house I didn’t really want after the 2008 crash (at 6% interest which was a decent rate at the time), refinanced to 4.5% a few years later and rented it out for years. Sold it once values rebounded and walked with almost $100k. It sucked in the moment but worked out in the long run, can for others as well.

[WarGamer]

33. I was a real estate agent in the 90's...

Here's what people do.

Middle class people, good income.

They paid let's say $400k for a house and a year later, it's worth 300k.

They finance a house down the street for 300k, financed as an investment property. Then they walk away from house #1, declare bankruptcy or just eat the 7 years of bad credit for the $100k equity "gift"

[madville]

36. Bankruptcy isn't what it used to be

Never ran in those circles I guess, most I knew from back then held their properties they got stuck with and rented them out for years until values rebounded, no bankruptcy or defaulted loans.

The ones I knew that defaulted either got caught when the music stopped trying to flip multiple properties with no buyers or couldn’t really afford what they had bought before the crash and got sucked into ridiculous mortgage products they didn’t understand.

[honest.abe]

34. Many walked away from their homes during the mortgage crisis in 2008...

due to the value of their homes being less than the what they owed on the mortgage plus the fact they had trouble making payments.

Absolutely could happen again.

[WarGamer]

24. No soft landing.

[OAITW r.2.0]

3. Give the workers more money. Suck up the profit loss. Them, embrace new thinking on

energy choices and cargo carrying tech - this Industry needs major disruption ....and I see a great place to invest on future RR tech start-ups. What we need are laws to allow more track use. And the control tech that supports this.

[MichMan]

4. Their demands are over time off and hours.

How does increasing wages address either of those?

[OAITW r.2.0]

7. My bad....assumed it was a pay issue.

Time off and reduced hours means more employment. Profits get reduced, but now Big RR has a bigger workforce that they can devote to transformational tech to reduce op costs and savings for consumers.

[ripcord]

23. This will not bode well for us in Novemember

The party in power is always blamed for the economy and I have already heard republicans who are giddy at the idea of Biden stepping in and stopping the strike.

[LeftInTX]

37. The Dems lost in the 1946 midterms due to a rail strike

https://en.wikipedia.org/wiki/1946_United_States_elections

[WarGamer]

25. This would be disastrous.

If I could, I'd advise the administration to see that it doesn't happen.

It would be crippling... we'd see fuel oil and gasoline jump 30% overnight... food shortages, supply chain devastated... UPS taking 3 extra days to deliver...

And a major stock market crash.

[Silent3]

30. If an agreement isn't reached by Friday (which Biden can help with, but can't force)...

...then Biden has no good political options. He either protects the economy, but alienates the unions, or lets the shit hit the fan, and suffers the political consequences from that.

I'd guess the former is better than the latter, but both are bad enough to crush the way things have started to look brighter for Democrats in November.

[BannonsLiver]

31. This thread is a chefs kiss.

Mylanta.🙄

[Calculating]

38. Awesome

Just what we need right now....

[Hotler]

39. I support my union brothers and sisters. nt