As I’ve mentioned before I love a good polemic and David Stockman’s rant against the Federal Reserve is a pretty fair example, at least by today’s feeble standards of discourse:
Yellen averred that she and her posse are in charge of everything, including the status of part-time hot dog vendors and the rate at which ambitious job seekers elect to depart their current employers for greener pastures. Once more, in monitoring every feather on the economic sparrow’s back, they claim the unfettered right to keep shoveling free money to their Wall Street vassals until they get the “feeling that it will be appropriate to raise ratesâ€.
This is unaltered Keynesian claptrap. It is the arrogant over-reach of a model-obsessed academic zealot who has no respect whatsoever for the real main street economy and for the historically proven truth that free markets are the best route to prosperity and higher living standards for the people, not the dictates of central planners.
In claiming the power to manage the microscopic details of the nation’s $18 trillion economy by the month and by the yard, the Yellen Fed has now gone beyond merely instituting some misbegotten labor economist’s version of Keynesian demand management. In fact, when it gets down to insisting that the PCE deflator must rise by at least 2.0%, not 1.4%; or that there is a meaningful difference between 5.5% and 5.2% on flawed metrics like the U-3 unemployment rate; or that the globally impacted trends like the rate of hourly and weekly wage growth are still a few decimal points too low—–what you actually have at that point is an economic putsch.
I think he actually goes a little beyond the pale in that he’s implicitly urging violence against the members of the Federal Reserve governing committee which is a bridge too far for me.
… they claim the unfettered right to keep shoveling free money to their Wall Street vassals ….
I think he has the chain of command backwards.
I think he actually goes a little beyond the pale in that he’s implicitly urging violence against the members of the Federal Reserve governing committee which is a bridge too far for me.
So, you’d have been a loyalist in 1776? 🙂
In fact, when it gets down to insisting that the PCE deflator must rise by at least 2.0%, not 1.4%;
The PCE deflator! Holy Crap! I think that makes him the second person to ever mention that bit of arcana outside of academia! (Mish is the first person I ever noticed mentioning that.)
If I had lived on the North American continent in 1776, I’d probably have been a subject of France.
Oh yeah, I forget you’re a recent arrival.
Quite to the contrary. Members of my family were standing on the banks of the Mississippi, selling real estate, when Chouteau and Laclede showed up to found the city of St. Louis. But I don’t have a drop of English blood and most of my ancestors didn’t arrive here via Boston, New York, or Philadelphia but by way of Quebec or New Orleans.
Keynes is one of the most misunderstood men in history. I doubt it not.
Ben, I had a similar thought regarding Keynes.
…
Okay, Schuler, then the United States is a recent arrival to you.
For one thing he shouldn’t be confused with the Keynesians, from whom he tried to distance himself during his lifetime.
Quite a rant and not very coherent. Reagan repudiated Keynes? The biggest deficit spender of his era? He cut taxes (yes, he partially raised them again) and massively increased govt spending. If we read through Obama’s recovery act we find that he cut taxes and increased spending. Same thing. Most of the deregulation he likes was actually done by Carter, especially the beer deregulation, the most important one. Sure, Reagan did deregulate the finance sector. That worked well.
Steve
It’s all fine and well to cluck, cluck about dead presidents and economists but, and this is the LBO guy in me who is used to looking down the barrel of debt service, this country better figure out a way to break out of the 2% paradigm.
All the government transfer programs, regulations, subsidies, tax policy mutilation, er, initiatives have a purpose, and therefore their advocates. But only a tiny minority of those purposes result in furthering growth. A mature economy saddled with decades of meddling is like an airplane coming in for landing with full flaps and requires full throttle to not come crashing down. When the throttle isn’t at the pilots disposal you’d better unload some of the drag. And then the bickering starts.
But denial doesn’t change reality as many developed national and local economies are discovering. All the do-gooder initiatives and special interests siphoning off resources have simply become unaffordable. We hear a lot about the programs necessary for a civil society. To be sure. But we are way beyond that, where the portion of siphoned off resources actually allocated, much less delivered, to worthy societal goals is laughably small. And we can’t afford it. Detroit, Greece or IL are just canaries in the mine.
The Democrats are currently populated by a crew that wants to double down on the very issues causing trouble. That’s a plane crash waiting to happen – fast. The Republicans seem dominated by a wing that is content to conduct a holding action. That’s a plane crash waiting to happen – slowly.
The country needs a change agent. I think that’s what Obama tapped into in 2008. Then he proved not up to the task and belly flopped. I see no real change agents at this time. In fact, traditional garden variety pander politics seems to have permanently evolved into its evil brother – pay for play. Not encouraging.
Drew, vote BLANK in 2016. It’s not much of a vote, but it’s about all you’ve got, and you won’t feel dirty about it later.