A bunch of stuff. But I don't see how one cancels out the other. There was a financial crisis to solve, and a recession that followed. Maybe you can state your point clearly. — Tzeentch
Maybe so, but I'm not talking about what caused the financial crisis. I'm talking about the Fed's response, and why it cannot be compared with what the Fed is doing today. — Tzeentch
... even the Chairman of the Fed thought the economy was going to settle itself out of the COVID response without needing any unusual intervention. — Tate
Yet one should understand that the role of money supply isn't going to officially acknowledged. It can be said when referring to Turkey (or Ukraine desperately fighting a war) or some Third World country by the media, but not in the case of the US or the EU zone.An unprecedented global lockdown has major consequences. Claiming this is used as a "patsy" is laughable.
Inflation has multiple causes. One cause is the money supply. — Xtrix
It seems not only to be acknowledged but downright insisted upon — myopically. — Xtrix
Aug 27 2021 (Reuters) - Federal Reserve Chair Jerome Powell on Friday pushed back against concerns that swiftly rising prices could become an enduring feature of the economy, forcing the U.S. central bank to raise interest rates and cut short the recovery.
While recent inflation readings are "a cause for concern," Powell told the Kansas City Fed's annual Jackson Hole economic symposium, responding to what he sees as likely to be a temporary trend by tightening monetary policy could be a "particularly harmful" mistake.
FRANKFURT, Sept 24 2021 (Reuters) - Many of the drivers of a recent spike in euro zone inflation are temporary and due to fade in the next year, European Central Bank President Christine Lagarde said.
FRANKFURT, Dec 2 2021 (Reuters) - Euro zone inflation remains temporary, two key European Central Bank policymakers argued on Thursday - "The current inflation spike is temporary and driven largely by supply factors," ECB board member Fabio Panetta told a conference. "Central banks should have the patience to look through these effects and explain their policies to the people."
Are the central banks accepting the blame themselves for the inflation? — ssu
What would you then criticize the central banks for?There’s plenty to criticize the Fed about. Being “the” cause of inflation isn’t one of them. — Xtrix
Unfortunately, in the short run, in trying to prevent a wage-price spiral from starting, the Fed is slowing the economy in a way that is likely to lock in employers’ advantage over employees.
Inflation hawks such as Powell appear to believe that if wages did go up a lot this year — say 7 percent — employers would pay for them with another round of big price increases, which would trigger another round of demands for higher wages and so on ad infinitum.
It's already been broken. For a long time.Eventually something will break— and again, probably has already. — Mikie
In FY 2022, the federal government spent $6.27 trillion and collected $4.90 trillion in revenue, resulting in a deficit of 1,38 billion.
The basic problem is that the US simply cannot change course without a financial crisis. — ssu
Well, this system has gone a long time without a crisis — ssu
My emphasis is on what the actual political system can deliver. Not what it could theoretically deliver. Yes, the US could simply copy the smartest most successful policies from other countries, but that's not going to happen. The sectors that prosper from the existing situation have too much lobbying power.They most certainly can, and I just went through how. Giving less than 90% of corporate profits to rich people, taxing corporations and wealthy Americans at a rate that was common in the 50s and 60s, and not spending 800 billion dollars annually on defense contractors — isn’t a crisis. The characterization that these actions would lead to a “crisis” is nonsense. — Mikie
They most certainly can, and I just went through how. Giving less than 90% of corporate profits to rich people, taxing corporations and wealthy Americans at a rate that was common in the 50s and 60s, and not spending 800 billion dollars annually on defense contractors — isn’t a crisis. The characterization that these actions would lead to a “crisis” is nonsense.
My emphasis is on what the actual political system can deliver. Not what it could theoretically deliver. — ssu
Nothing will change until there's a crisis. — ssu
Well, with these kind of union participation percentages, I doubt it. And I think these low participation rates are the reason just why employers in the US can be so aggressive against unions. Have a large majority of the workforce unionized and it's politically totally different.True— which is why the workers need to cause a crisis. Through strikes in key industries. Only then will concessions be made. — Mikie
And I think these low participation rates are the reason just why employers in the US can be so aggressive against unions. Have a large majority of the workforce unionized and it's politically totally different. — ssu
So the economy is between a rock and a hard place: if the fed does nothing, inflation continues to climb, if they act, it could potentially cause a string of bank failures the government would probably have to deal with. — frank
. Governments bearing the risk of bank failures turn people apathetic to their banks' behavior. — Tzeentch
I think the Fed is now busy saving the banking system... again. And with that of course, it doesn't have to be worried about the money having the same effect as those covid-dollars put into the pockets of Americans that were forced to stay home. During these times the banks will hold on to that money like Scrooge McDuck.That cannot go unpunished. — Mikie
Economists are only people, and when people come together, there's usually the the "in crowd" and those would like to be in the in crowd. I think in the 1980's was the peak for the Chicago School.Also, our state university economics department regarded the University of Chicago economics department as an econ policy mecca. I seem to remember this trivia as more important than the content of the course. — Mark Nyquist
Economics as a profession have deep ties with Central banks. After all, few of the most lucrative positions are held there and Central Banks (not just the Fed) do sponsor economic research. So for example the very long and interesting history of the US opposing a Central Bank is very much put aside to the conspiracy theorists to argue about.Also I've picked up a long the way that institutions such as George Washington University and U of Pennsylvania's Wharton school have close ties with covert US Federal economics policies and personal. — Mark Nyquist
I think the Fed is now busy saving the banking system... again. — ssu
Oh it was the Fed.I don't think that was the Fed, if you're talking about 2008-2009. It was Congress and the Treasury. — frank
It simply wasn't in the news. Only later we found out that the whole financial system had been close to collapsing. And just how much was given to banks and corporations.A 2011 study by the Government Accountability Office found that "on numerous occasions in 2008 and 2009, the Federal Reserve Board invoked emergency authority under the Federal Reserve Act of 1913 to authorize new broad-based programs and financial assistance to individual institutions to stabilize financial markets. Loans outstanding for the emergency programs peaked at more than $1 trillion in late 2008."
Broadly stated, the Fed chose to provide a "blank cheque" for the banks, instead of providing liquidity and taking over. It did not shut down or clean up most troubled banks; and did not force out bank management or any bank officials responsible for taking bad risks, despite the fact that most of them had major roles in driving to disaster their institutions and the financial system as a whole. This lavishing of cash and gentle treatment was the opposite of the harsh terms the U.S. had demanded when the financial sectors of emerging market economies encountered crises in the 1990s.
This would be the proper antidote. And politically it's totally impossible.No more bail outs and no more money printing. — Tzeentch
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