A recession so contrived and man-made that every economist, politician, businessman, college student, CEO, rapper, and professional athlete has been able to see it coming in real time for months and months…
Take a picture, you may never see anything so obvious about to happen again. A child could have foreseen it.
At some point, a person in charge of price stability should probably look in the mirror and say, “For whatever reason, I’m not good at this. Either whatever method I’m using to make decisions isn’t right or does not produce positive results.”
I don’t think this is too much to ask of the people we put at the head of our institutions.
The Federal Reserve’s Open Market Committee, for example. If in any given year you find yourself oscillating furiously between stimulus and austerity, it may be time to stop and reassess. It can be the data you use or the way you use it. It may be your instinct. It can be a combination of things. The pendulum should swing, but not all the way in both directions all the time. This is not a cycle, it is a circus.
If your forecasting skills led you to the conclusion that you shouldn’t raise any rates in 2022, followed a few months later by having to make the biggest rate hike ever, maybe not you are good at this If you’re buying mortgages and Treasuries to stimulate the economy in March and then deliberately trying to rig the markets and create a recession in September, you’re probably not the right person to be in charge of the money supply. You may not be the “price stability guy”.
I’m sure you mean well. I’m sure you’re doing your best. I’m sure there are challenges that the rest of us can’t see. I understand. But still. What are you doing. Literally
They are not numbers on a spreadsheet. We’re talking about the lives of the people being played with. The social costs of being disengaged from employment are evident at the aggregate level. On a local and personal level they can be catastrophic. Creating massive bubbles in one calendar year only to have them burst the next calendar year is irresponsible. There should be something between 90 mph and hitting the electric brake. Isn’t that taught in PhD school? Most of us are taught moderation in elementary school. The marshmallow test. Impulse control. nap time listening
Zero percent interest rates plus fiscal and monetary stimulus with housing 40% higher and stocks at record highs was a ridiculous policy. Everyone said so at the time. This is where I left off last May, for example: Stimulating the housing market is psychotic. An equally ridiculous policy is that record rate increases are piled on before even trying to see if the first ones are having the desired effect. Why wait to see if the economy will cool down when we can just crash it and be absolutely sure? Ok, I guess that’s a strategy…
I don’t think everything that depends on data is going to be fine. If it’s gotten us this far, I think we can try something else without sacrificing anything. Let’s try relying on common sense, see if that goes a little better. Or give it to someone else.