It’s Urgent

It’s Urgent

"It’s essential that we move with urgency -- inaction will produce a self-reinforcing downturn causing yet more devastation," Janet Yellen proclaimed on Tuesday, after being introduced as Joe Biden's Treasury Secretary-in-waiting. "To the great public servants of the Treasury Department, I look forward to working with you to rebuild the public trust," she added. Yellen's short speech served both as an explicit commitment to combatting the myriad inequities embedded in American society and as
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7 thoughts on “It’s Urgent

  1. I’ve made optimistic comments about vaccine rollout before. But for the sake of argument, what happens if “tomorrow”, i.e. the return to normalcy following successful vaccine rollout, doesn’t happen very fast? What if we get to May-July, and we find that only 30% of the adult population is getting vaccinated? And with the pediatric trials lagging behind adult trials, the rollout to school-age kids (<12 years old) might not happen until late 2021 or 2022. We could be sitting in Sept 2021, vaccines rolled out, and yet we could still have distance learning, no child care, social distancing. I don’t think the stock markets are taking this scenario into account.

  2. I feel obliged to engage.

    Although I’m glad the market is finally waking up from the monetarist fantasy that started in 1998 with the LTCM fiasco and reached its ‘finest’ hour with the GFC, the terrible consequences of their actions will be felt for decades to come.

    The excuses:
    “… fostering economic growth and stability to an unelected body of technocrats operating with a limited tool box and informed by a soft science, you shouldn’t be surprised when things go awry or when the outcomes aren’t utilitarian in nature. ”

    The reality:
    “We’ll make society carry the burden of our mistakes once again with an experiment called MMT.” The size of government has swelled to gargantuan proportions following the same logic central banks do. If its not working its because its not large enough.

    https://www.wsj.com/articles/helicopter-ben-bernanke-says-bank-of-japan-government-can-cooperate-more-1495605120

    Everything they do makes the system more and more sensitive to the slightest breeze. Risk and volatility cannot be destroyed, just transformed or displaced. Top-down central planning has failed over and over again yet people keep asking for more. Complexity has defeated all central planners regardless of their position in government, being elected or not, and will continue to do so.

    Don’t get me wrong, trickle down economics are also based on flawed logic, but that’s a debate for another time. The answer is simple, reduce the size of government and shift its focus to regulation, not intervention and provide basic services being healthcare, education, security and basic infrastructure. Guarantee equality of opportunity, not equality of outcome.

  3. It is long past the time to put monetary policy on the back burner. Not that I am a harsh critic of the Fed, it is just that at this point, monetary policy has many bad side effects as a price for relatively ineffective stimulus. Monetary policy at this point should only be an adjunct to help implement the other intiaitives. Other policies- regulatory, fiscal- spending and taxation, trade, as well as social policy can have a much more effective impact without many of the negative side effects. And they can be more direct and effective.

    1. H: “Congress has the power to ameliorate the situation and they never do.”

      The main reason for this is that Congressional priorities are, in order: 1) Keep the job; 2) Raise lots of money from fat cats to fund the next election campaign (we vote every two years so this is continuous; 3) Don’t set up anything for the “little people” because they can’t do anything for you and anyway, that’s socialism (look how many of those socialist idiots lost this year); and 4) Openly hate abortion, LGBT rights and support the Second Amendment. That’s it; the rest is immaterial. Besides, there is no intelligence test or background check required for those running for Congress.

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