Tuesday, February 26, 2019

Stockman: Fed Mismanagement Will Spark ‘Tremendous Negative, Left-Wing Political Reaction’

Watch the below video.

David Stockman has the numbers to back him up and gets the analysis correct.

He nails it. A massive left-wing political backlash is coming and it is not going to be pretty:



  1. While this is, of course, true, there's nothing we'll be able to do about it (and we've been talking about this very fact for decades). The Fed shifts money in a "double-whammy" to those who are wealthy. The first "whammy" is those with access to newly-printed money get the most value. The second "whammy" is those with access to newly-printed money are the ones who have the most hard assets that generally hold their value from inflation.

    The only thing that has prevented a revolution is productivity has been rising dramatically -- making day-to-day living costs less expensive (except for hard-asset driven prices like rent). While costs are less for most things, the asset-related wealth is funnelled toward the more wealthy among us. Thus, overall wealth from productivity gains is mostly funnelled toward the rich via the Fed. Although everyone benefits from the productivity gains, those benefits are greater percentage-wise for those with assets.

    It's also no particular new insight that collectivism's failures beget more collectivism. The collectivists always claim that their failures are lack of collective commitment, and we just need to double down.

    1. As the structure of production has been massively distorted by artificially set interest rates for the past n years, we have likely experienced significant capital consumption and malinvestment, which over time will lead to -- if it hasn't already led to -- a slowdown in productivity growth. Capital is the largest engine driving productivity growth, and if it is being consumed or wasted, that's not a good thing.

    2. Significant capital consumption from artificially low rates? You have no idea what you are talking about.

  2. It should have been a basic project for libertarians and at least the LP for 45 years to have the simple goal of teaching the public that inflation is a purposeful policy of the government and not a mysterious and inexplicable force of nature. No one is going to understand the ABCT or its precursor concepts, the Socialist Calculation Problem, Cantillon Effects or false funny money pricing without understanding what inflation is and what causes it. I see no such teaching project on the horizon.

    Actually, the MMTers with their lunatic promotion of the wonders of fiat funny money may actually help with that education project.

    1. "understanding what inflation is and what causes it. I see no such teaching project on the horizon."

      This is not only spot on but no one talks about ongoing stealth inflation in areas such as food packaging where less costs more in volume or even in the efforts of the continuing push to create debt serfdom in the areas of higher education and healthcare.

      You know ... Socialism starts to look pretty good when your are sinking for the last time.