> This inflation issue is entirely a making of our own shortsightedness.
Yes, central banks printing money relentlessly for more than a decade has nothing to with it. We the people are to blame!
Yes, central banks printing money relentlessly for more than a decade has nothing to with it. We the people are to blame!
Baby steps towards raising rates (during massive boom years) were decried by the markets, by politicians (an particular an ex-President) and by the populace generally who are not well informed on what central banks do. The central banks should have raised rates anyways - but let’s not pretend like everyone wouldn’t have hated them for causing a recession or even just a slow down in growth by doing so.
The whole point of the nominal independence of the Fed from the political process is that they would be able to take unpopular decisions that may hurt in the short term but will further their dual mandate (maximum employment and price stability) in the medium and long term.
Seeing as they cannot do that, and these days are venturing further away from their mandate by assuming the mantle of fighting climate change as well as racial inequity, we might as well do away with it entirely. It's not like the financial history of this country hasn't been replete with one crisis after another even after the advent of the Fed, and one dollar at the time of the creation of the Fed is worth about $30 now, so prices have only been stable for a strange definition of price stability. (For comparison, the Swiss franc inflated about 10x in a similar time period.)
Exactly! We saw what cheap money did to rebound the economy after the 2008 crash - it created the largest bull run we've ever seen.
Politicians, hoping to keep their jobs (and make sure their trading accounts grew), said "yeah, we'll keep things right as they are" because they didn't want to be the ones that caused a cool down which would in turn cost them their jobs (and insider information).
Is this central banks diverting attention or is the parent comment overly simplifying this?
Plus, keeping interest rates unrealistically low for over a decade just to please the highest echelons of financial power (under the bullshit guise that lower interest rates == more jobs) does nothing more than pause the natural economic cycle and, honestly, it just makes the bust that much more inevitable and dangerous.
It’s not totally wrong mind you, but as we all know, prices are set by supply and demand.
An obvious example that I think a lot of people can easily connect with is the fact that globalization has been deflationary (it’s driven prices down), and that isn’t a monetary phenomenon.
As someone sympathetic to MMT, the solution in my opinion has less to do with the fed, Congress needs to tighten fiscal policy.
The problem is - how do you improve this system while taking into consideration the real-world effects of Fed policy?
I guess I can imagine how such a editorial process could create a monoculture (although I don't think it has to), but that's where multiple newspapers become useful. While one newspaper may have some editorial angle, different newspapers have different editorial staff.
Journalists also seem to me to be rather principled people. If their editors were systematically suppressing certain stories and angles, I'd expect them to start a new newspaper, especially considering how easy it is to get started nowadays, and report on that.
With all these considerations I don't see what system would keep these stories back. Editorial staff can maybe control a single newspaper, but they can't control the other media. Even if they could, they wouldn't be able to control journalists that may become disillusioned by such a system.
I don't believe that a conspiracy is required per se, but i don't see what other argument you could be trying to make. I can tell from your rhetorical questions that you're implying some power dynamic and allegiance between politicians and CEOs, but I don't see how that explains the peoples own propensity for voting for those same politicians.
If democracy does nothing else, it at the very least implicates the people in their own apparent suffering. You can't really decry the "elites" if you vote for them.
It's a bit like an unhealthy person dying from a heart attack. What's the cause of death: the heart attack or decades of unhealthy habits? And if the later, which habits and how should the person have changed? Even then, something is missing if the explanation omits the heart attack itself.
I have never seen central banks trying to divert attention. That something that politicians do, and central banks communications tend to be done by technical people (not by their heads).
I have seen plenty of head of governments trying to divert attention from some economical fact, but the lack of understanding of fundamental things, like cause and effect, monetary identities, and the difference between monetary and real indicators are always there and don't seem to be planted by any PR team.