Jay Phagan / CC
CONLEY COMMENTARY (WSAU) – Connexus Credit Union in Wausau is laying off 16 workers this fall. One of the people I’m working with at The Joseph Project was recently laid off by a local manufactured home builder.
Why do you suppose this is?
Make no mistake: this is the result of Biden-Harris inflation and high interest rates. All 16 of the Connexus workers are involved in loan processing. When interest rates are high, the number of people who can afford mortgages go way down. So the credit union needs fewer workers to process those loans. With fewer people taking out mortgages, business for a manufactured home company goes down too. So… fewer employees.
Interest rates are the cost of borrowing money, and until this week they’ve gone up since 2020. It’s the federal reserve’s number one tool to curb inflation, which is finally slowing down.
I was lucky. I bought my home when interest rates were low – 4-percent. Today it’s closer to 7.5 percent. What’s the impact? The $80,000 I borrowed comes with $3,200 in interest costs that I have to pay. If you borrow the same amount today the interest costs rise to $6,000. For people entering the housing market, today’s rates may not be affordable. So the bank needs fewer people to process the loans that won’t be taken out, and the manufactured home building needs fewer workers for the homes that won’t be built.
What caused this inflation? The Biden-Harris Administration tried to goose the economy by breathtaking amounts of federal spending. Wausau still has COVID dollars, three years after the pandemic is over. It paid for the new fencing outside the police parking lot. There are still billions of dollars in the wrongly-named Inflation Reduction Act that are still waiting to be pumped into the economy.
The best way to manage the economy is through supply and demand; consumers decide how much of anything is needed, and the private sector will provide those goods and services. Government tinkering, and the Biden-Harris Administration are master-tinkerers, upsets the economic balance.
I’m sorry for the local workers who are losing their jobs. It’s because of the current government’s merry adventure at trying to engineer the economy.
Chris Conley
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