This post outlines some general observations I’ve experienced over the last handful of days. As such, it won’t be ordered in any particular way; just stuff that I toss out there to chew on.
On my Facebook account, I still have remnants of my not-so-distant past of being, as some may loosely term, a political activist. Included in that pile of old things are groups that were once dedicated to discussions about particular candidates but have long since morphed into venting arenas where people can post various stories from around the web and express outrage (mostly). There is very little therein that I judge as constructive.
With many polls indicating that Donald Trump is a leading contender for the Republic presidential nomination, I decided to take a look at them to see what people are saying. Perhaps they saw something compelling that I’ve missed. One group member posted a roster for the Trump White House featuring Ted Cruz as VP, Alan West as Secretary of Defense, Carly Fiorina as Secretary of Commerce, and so on. I politely posted that I was leaning toward Marco Rubio because of his economic policy proposals and that I hadn’t been able to find any specific policy outlines on Trump’s website. The venom heaped upon me was unbelievable.
Then, someone posted this story about Trump proclaiming he would be “the best representative of Christians this country has seen in a very long time.” And this time I wasn’t so polite commenting, “Let me try to understand this. You all blackballed Gingrich who had some very concrete and promising economic policy proposals because he has had three wives. How many wives has Trump had that he dumped for young supermodels after they hit 40? Has he had anything important to say about specific policies, like maybe how we’re all supposed to put food on our tables? If so, show me. Elections have consequences.” No venom this time, just silence.
Today these groups provided the icing on the cake when someone posted a link to this story on Breitbart with the caption, “Social Security Administration confirms that illegals will begin receiving benefits in 2017” that was followed by heated rants on illegals. It was obvious to me that nobody, including the original poster had bothered to read the article or follow the links because I did, and the article referred to those provided amnesty under Obama’s Executive Order that was handed the smack down in the Court of Appeals, and the Administration said it would not appeal to the Supreme Court. The Executive Order on immigration is dead. The whole rant session was much ado about nothing.
These people are seething mad, devoid of all rationality. And I fear what my fellow countrymen might foist upon us all from the ballot box as a result. Banana Republic, here we come!
For a change of topic, James Alexander, a.k.a James in London, has a post on Historinas about the inherent contradictions, or conflicts of interest rather, in the traditional role of the central banks as banking regulators when they are responsible for much of the instability that afflicts the banks from time to time. And it got me thinking in some different ways about some polices that don’t seem all that coherent to me.
For instance, the recent increase in reserve requirements makes very little sense to me. Because if the same monetary conduct from 2008 were to replay itself, foisting a massive downward repricing on markets at large, the percentage difference in reserve requirements would make very little material difference to the stability of the financial system in the same way that the American Recovery and Reinvestment Act made very little difference on the economy at large. It’s like a tight-money vortex opened up in the world and sucked up everything, growing larger and larger as it devoured wealth. There is no way to put that downward price adjustment genie back into the bottle once it has already begun to claim banks. We should never foist that kind of adjustment in the first place needed or not. The cure is much worse than the disease itself.
And speaking of cures, it is not entirely clear to me that central banks can control inflation in the way that many people imagine. They can influence it through expectations management. But I won’t be entirely convinced of that until the BoJ hits its target.
Even the Fed doubts it can hit its target as evidenced by Fed officials simply not talking about it anymore. And this puzzles me because inflation (or the forecasts) is obviously unreliable, but among other excuses for tight money of late, to become tighter soon, they still use the excuse that if they don’t tighten now, it will hurt much more when they tighten later. But there isn’t any real discussion about what is supposedly to come later. I mean, if we were to be dancing around in the streets amidst flurries of $100 bills, one would think that 18 months after the start of the taper, we would have seen it by now. In fact things look much different than these lofty expectations, with people wondering if were headed back into recession in 1Q only to eek out 2.3% in Q2.
Something is terribly wrong when all of this being wrong and being proven wrong is treated very casually with the misleading threat behind it that if the Fed isn’t allowed to continue, we will pay dearly later. We’re paying for this policy derangement NOW in years of lost productivity, time that we will never get back.
And this is expressed in different ways by different people, like the very real anger into which Donald Trump has tapped. The public has every right to be angry. They’ve been robbed and lied to continuously. They just don’t understand why they angry and it ends up as a sort of ongoing public rampage of epic stupidity that simply will not end well.