rowland wrote:Macroeconomics has painted itself into a corner. There's nothing left but to double down on denial. Denial is a kind of psychological pain management for the terminally ill.
Tell me about it. We have people who for 6 straight years were 180 degrees wrong on the recovery and missed the entire thing. It really was right in front of us, I'm not sure why so many people missed it but they did. Obviously that makes people bitter when they miss the boat so spectacularly like that.
But strangely after being wrong for 6 straight years they have for some reason decided to now jump on board and start cheerleading the Fed and their zero interest rate policy. It's really hard to imagine this isn't a splintered personality on display here.
There is nothing that can be done to save the cult of the centrally managed economy
Yes there is. Make good decisions, that's what can be done. Zero interest rate policy and quantitative easing was to save the United States from the same fate we've witnessed with dozens of other countries that didn't / don't act in a crisis.
But it was never meant to be permanent. If kept to a 5 year plan it can easily be contained and absorbed by the United States' astronomically high GDP and overall net worth. If left to continue and stagnate far past it's shelf life, the long term damage could be disastrous.
The Fed was right to rescue the economy when it needed it. The Fed is now wrong for continuing the policy further. What the United States desperately needs is a return to simple counter cyclical fiscal policy. Spend when needed, save when it isn't.
But this whole spend when it's needed and spend more when it doesn't should probably stop now. It's enough Yellen. You can raise rates now. The economy is going to be in recession soon regardless of what's done. It's best to just normalize rates and let the chips fall where they may.