Economy
Related: About this forumThe Keynesian Apotheosis Is Here—But Blame The Final Destruction Of Sound Money On The Bushes
by David Stockman June 20, 2014The only thing that can be said about Janet Yellens simple-minded paint-by-the-numbers performance yesterday is that the Keynesian apotheosis is complete. American capitalism and all political life, too, is now ruled by a 12-member monetary politburo, which is essentially accountable to no one except its own misbegotten doctrine that prosperity flows from the end of a printing press.
To be sure, this non-sensical and historically disproven proposition gets all gussied up in neo-Keynesian Fed-speak about dual mandates, monetary support to aggregate demand, slack in labor markets and remaining shortfalls from potential GDP, among endless like and similar jargon. But it did not take long during yesterdays presser to reveal that Yellens mind dwells completely in a circular puzzle palace.
For once she got a decent question or two, but answered by lapsing instantly into ritual incantation about the macro-cycle the Fed pretends to be superintending. Thus, when asked about the tepid rate of business investment in future productivity and growth, the answer was: Right, thats why we need ZIRP for longer! That is, until we can inflate the GDP tire by monetary accommodation, expect CapEx to run flat.
Heavens to Betsy Janet! CapEx has been running flat for 14 years. The compound growth rate of real plant and equipment spending is less than 1% since 2000 and is still 5% below its 2007 interim peak. There is nothing remotely this dismal during any extended period in modern history.
http://davidstockmanscontracorner.com/the-keynesian-apotheosis-is-here-blame-the-final-desttruction-of-sound-money-on-the-bushes/
enki23
(7,786 posts)The very piece of shit motherfucker who brought us most of "Reaganomics" and one of the largest budget deficits in U.S. history? The very same motherfucker who managed to wriggle out of a fraud indictment just a few years back? This piece of fucking lying filth is a piece of fucking lying filth.
His input on anything can only serve to make it shittier, as it has for his entire fucking life so far as I can tell.
Crewleader
(17,005 posts)I watch and read, and try to inform....but I don't appreciate the language you use in your asking enki23..
I did find his summary in the end accurate and a how the past 40 years of the Fed's policies have been for us all.
"As we now embark upon the apotheosis of Keynesianism it can be well and truly said that the conservative party in America brought this baleful condition to its present estate. First, with Nixons abominations at Camp David in August 1971; and then with the horrid economic legacy of the Bushes who brought the Keynesian destroyers to the killing rooms of the Eccles Building."
Crewleader
(17,005 posts)The Federal Reserve and others have worked hard for reputations as independent, professional and trustworthy. The problem is that central bankers are happy to oblige. Instead of pressing governments to fix the issues themselves, the Draghis, Carneys and Bernankes of the world have been printing and launching experimental programs. Theyre being asked to monitor banks, housing, markets and the entire financial system. They being asked to look for bubbles. Some are being asked to manage reserves with central banks now investing in risky assets like stocks. This is a grave error.
Sure, they might have a bit more success than politicians but very few central bankers and zero central banking institutions saw the crisis coming. Most of them still didnt anticipate a recession in the days before Lehman collapsed. This bubble is in central bank power. One day there will be another crisis that central banks didnt see and cant control. When it goes bad theyll be blamed and chastised by the same politicians who empowered them.
http://thehousingbubbleblog.com/?p=8454
The bubble is in central bank power
Faith in institutions is at an all time low.
Gallup polls Americans annually on different institutions and reading through the results is saddening. The percentage expressing confidence in Congress is 13% compared to 42% in the early 1970s but its not just politicans. Banks, police, the Supreme Court, newspapers, religion, public schools are all deeply unpopular. Surveys in the UK show a similar phenomenon.
http://www.forexlive.com/blog/2014/06/17/the-bubble-is-in-central-bank-power/
AdHocSolver
(2,561 posts)While Keynesian economics may be cited by the Federal Reserve as the rationale for its policy of easy credit, its activity is actually promoting "trickle down" economics for the benefit of the 1 percent.
As Stockman suggests in the article, easy credit is being used by those who already have some significant wealth as "free money" to "gamble" in the real estate and stock markets.
Keynes' postulated that governments should spend money on infrastructure to provide jobs and income for workers who would then be able to purchase goods and services (increase demand) and thereby grow the economy and create more jobs.
The Fed, by keeping interest rates artificially low, is actually damaging the economy, by cheating depositors out of a realistic return on their savings. Unemployed people cannot borrow and spend money when they have no income to repay the loans.
Moreover, bank depositors earn less on their savings than the current inflation rate so they lose principal.
Meanwhile, the wealthy get essentially "free" money to rig the stock market, buy out existing American companies and ship the jobs to China, and send the profits to tax havens such as the Cayman Islands.
Federal Reserve policy is NOT the solution to our economic problems. The Fed is a primary CAUSE of our current economic problems.
Crewleader
(17,005 posts)I got this article from the Housing Bubble under the comments, I post a lot of housing links. Caught my interest...Economy and
On the Fed, I certainly found his criticisms valid too.Not a fan of the Bushes or any Republican including Stockman.
I found the cost of living chart real and we all feeling the inflation and now gas prices again.