Productivity Pay for Mr Powell and the Congress

I had a few blog posts ready to go. But my heart was not really into it until today. I was reading an article that was lamenting that for sure we are headed for a recession in the USA and mostly because we waited much too long to pay attention to rising inflation. By "we" I mean our national economic policymakers. Any remedies for inflation for today will surely hurt the economy and will have proportional impacts on the stock market. 

Simple translation -- we have idiots in charge of national economic policy and most of us will pay for it. That seems right on one hand -- we voted for those morons. We should pay.  But let's not take all the blame. It was hard to see in advance how stupid our leaders would be about national economic policy. They are obviously very good at wearing nice suits and making lofty speeches -- not so good at actually doing anything. 

As I said, in this state of mind I was reluctant to bore you with another negative post. How do we have fun instead? And then it occurred to me that even if we cannot make the below solution happen, it is at least fun to talk about it and who knows, maybe the idea will catch on.  

If you screw up at work, your boss might penalize you by making you work more hours. She might even reduce your pay. Same thing at home. If you forget to take out the trash on Friday night, your spouse might cancel that evening's frivolity. You drop that pass, coach takes you out of the game.  If you are a professional athlete you might not get your bonus. You are getting the picture. In life, failure has consequences -- sometimes severe consequences.

Failure in life often hurts your wallet. 

Why not apply this idea to the Fed and to Congress? Why not directly tie their income to their failures? Why does that sound so outlandish? If the Fed let's inflation rage on, how many people are hurt by that? We measure that hurt in billions of dollars. If the Fed or Congress react to rising inflation by causing a recession, do they not do incredible harm? How many people lose their jobs? How many people lose income? How many people cannot make their dollars stretch to buy the necessities of life?

So it seems fair to me -- if Mr. Powell or members of Congress cause us all economic pain, then they should share in the misery.  How much money does Powell need anyway? Powell only makes about $200k per year as head of the Fed but somehow this uncharismatic individual has accumulated more than $50 million in wealth over his lifetime. Before adding benefits, Congressmen make a salary of around $200,000 per year. Wink wink. 

These people aren't super rich from their salaries but we all know the perks are pretty good. They do wear nice suits, right?

Anyway, they certainly are not poor so why not let them share in the people's misery. For example, we could gear their incomes to changes in the unemployment rate. If the unemployment rate goes up this year, then let's have a formula -- or a people's committee -- or some mechanism  that will lower their pay. I can imagine an interesting formula that is something like the below:

Income = $200,000 

                - .5* the increase in the unemployment rate 

                -.5* the increase in the inflation rate 

                -.5* the increase in the real interest rate

                -.5* the increase in the national debt

                -.5 * whatever else you believe is a proper goal of the Fed and the government

There might be some lower bound to their pay. Maybe we say it is okay if they earn the minimum wage as a floor to their salaries. At about $15 per hour that's about $600 per week or about $30,000 per year (50 weeks). Hopefully if Senator X made $30,000 per year for a while, we would vote him out of office. Or maybe he would quit. 

The thought that these goofballs might get paid according to their productivity might get their attention. If you guys mess up our economy, then we mess you up too. No, it doesn't matter that you tried. If you failed -- you are treated just like any other member of the labor force.  Seems fair to me.