In a tweet, President Trump said “China will be pumping money into their system and probably reducing interest rates, as always, in order to make up for the business they are, and will be, losing,” the president said in a tweet Tuesday. “If the Federal Reserve ever did a ‘match,’ it would be game over, we win! In any event, China wants a deal!”
The president later told an audience in Louisiana that “with a little quantitative easing” U.S. growth would hit 5%.
Of course, Fed money printing is an even more asinine economic policy than a trade war which is asinine enough. It distorts the capital-consumption structure of the economy, creates a fake boom and ultimately leads to a bust, usually with a period of strong price inflation.
Murray Rothbard explains the distortion boom-bust cycle in Austrian School Business Cycle Theory.
-RW
Hello, Robert!
ReplyDelete"Of course, Fed money printing is an even more asinine economic policy than a trade war which is asinine enough."
It's indeed worse because tariffs are a tax on your trade decisions but inflation (money printing) is a hidden tax on your labor and savings. Marx claimed capitalists stole part of laborers' work to pocket as profits (a misunderstanding of how profits are obtained and an idea that was mercilessly debunked) but inflation IS exploitation of everyone's labor (not income, the labor itself). It is likely Trump ignores all of this, taking into consideration he really believes tariffs are paid by Chinese sellers and not by American importers and consumers, according to the Axios piece you mentioned in a previous post.
#resist!! #impeach!!
ReplyDeleteI'm only half kidding...
Sounds like wants to juice a big fat bubble to help him win a second term, then he doesn't care about inflation or the bubble bursting.
ReplyDelete