I don't expect that Michael Saylor or any software engineers are filling out fast food job applications as of yet, but McDonald's surely hopes there is at least a kernel of truth to the meme: Kitchen staff has been so hard to recruit lately they've had to shrink their menus.
Fewer menu options at McDonald's is not exactly a tragedy, but lots of other employers have been in the same boat — a primary reason the Fed has been raising interest rates.
Chair Powell is optimistically hoping to thread the needle with those rate hikes by reducing the number of job vacancies without reducing total employment.
One way to do that would be to increase the supply of people to hire — which the crypto industry is now in the process of doing.
I'm only marginally more qualified in economics (four college credits) than I am in engineering (zero college credits), so I can't tell you how much of an impact the crypto bust could have on the job market.
Probably not much, but probably not nothing either?
Reducing open jobs without reducing employment is a party trick that no central banker has yet pulled off, so I'm sure Powell is appreciative of any little help crypto may offer: Motivating crypto day traders and NFT influencers to take jobs at McDonald's won't hurt.
Feeling the Impermanent Losses
That will admittedly help things only at the margin, if at all, but consider that the crypto bust is also aiding Powell's agenda in a similarly battery-like way via the wealth effect.
There's a lot of talk about how much money has been "lost" or "destroyed" in the crypto bust, but that's not really how it works.
Money does not ever get destroyed in markets; it just gets moved around.
When assets are exchanged at higher prices, we all feel richer, and when they are exchanged at lower prices, we all feel poorer.
The crypto crash has made us feel $2 trillion poorer, but no money has actually been lost or destroyed — all my losses have been someone else's gains.
Those gains and losses net out to zero, but when the last traded price is lower, all those who haven't transacted feel poorer.
This is what Chair Powell has been aiming for with his hikes: Motivating sellers to accept lower prices for their assets is not so much about imposing losses on anyone as it is about making all the rest of us feel poorer.
Powell mostly has the stock market in mind when attempting to lower demand via the wealth effect.
But the crypto crash has the same negative wealth effect — to a smaller degree, of course, because it's a smaller market, but perhaps disproportionately large due to all the media attention it gets.
It may also be disproportionately useful in the Fed's fight against inflation because nothing of consequence is being disrupted.
Raising interest rates to lower stock prices has the unfortunate consequence of also lowering business investment, which counterproductively hinders the very supply response needed to painlessly lower inflation.
Crashing crypto prices, on the other hand, have the same desirable wealth effect of lowering demand without the negative side effects: Disrupting the supply of JPEG NFTs and metaverse real estate presumably does no harm to the economy.
So? To the extent the booms and busts in digital assets are caused by (or are at least coincident with) the Fed cutting and hiking interest rates, crypto is helpfully smoothing out the cycles of both labor markets and consumer spending.
We've all been wanting crypto to develop new use cases, so maybe this is one: helping the Fed do its job.
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