Writer David McWilliams penned an excellent article in the Financial Times: Quantitative Easing was the Father of Millennial Socialism.
McWilliams notes that Fed chairman Ben Bernanke's "cash for trash" QE scheme drove up asset prices and bailed out the baby boomers. The cost of course, was pricing millennials out of the housing market.
Unorthodox policy penalizes the asset poor.
What assets do millennials have? Hardly any. Instead they are saddled with mountains of student debt which, thanks to president George W. Bush, could no longer be discharged in bankruptcy.
The Bankruptcy Reform Act of 2005 would have better been called the Debt Slave Act of 2005.
Then, when the Great Financial Crisis hit, the Fed came along bailed out the banks, bailed out the bondholders, bailed out Fannie Mae, and bailed out the asset holders in general, leaving millennials mired in debt unable to afford a house.
Simmering Stew of Anger
The irony in this simmering stew of anger is people blame Trump, not the Fed.
But socialism, even AOC's radical socialism is not about Trump, at least directly.
I had a lengthy phone conversation with David Stockman after I finished reading his new book, "Peak Trump".
The first thing I said to him was "This really isn't about Trump, is it?"
He laughed, then responded along the lines of, "You are correct. Trump is a symptom of the problem. He wanted to drain the swamp but failed to do so. He never really had a good chance of doing that, but he failed to make the most of the chance he had. We are where we are because of decades of Congressional and monetary mismanagement."
I gave his book two thumbs up in "Peak Trump" by David Stockman: Book Review
Trump Won the Election Because
- Obama promised change and failed to deliver. Wars continued so did drone policy. Obamacare was a disaster. In his first term, Obama bailed out the banks.
- The millennials wanted Bernie Sanders and the Democrat leadership rigged the primary for Hillary. Many disillusioned millennials then sat the election out.
- Trump's message appealed to union workers in the rust belt states who believe China was stealing our jobs.
- Many believe Hillary is a bigger warmonger than Trump.
- People genuinely cannot stand Hillary, for many good reasons.
It took all of those things for Trump to win, and then just barely.
Rise of the Radicals
Now, instead of drifting towards the middle, the radical Left, epitomized by AOC and her Green New Deal, have an open battle to win the heart and soul of the Democratic Party.
But why should she care?
Also note that the socialist don't like tax breaks for Amazon. The result was Hooray! No Jobs for New York.
But why should socialists care when the Stunningly Absurd "New Green Deal" guarantees living wages no natter what you do or what your skills are?
And let's not forget Progressive Lies Like "Free College" and "Medicare For All".
Yes, AOC is an economically illiterate pompous twit, obvious even to a the Greenpeace co-founder.
I have a socialist friend who knows full well how nonsensical his plan is.
But he is so irritated by bailouts, Trump, tax cuts on the rich that he doesn't give a damn. He is rooting for AOC to "balance things out".
So, here we are.
Yet the irony is that independents will not vote for extreme nut cases with $80 trillion plans, nor will they vote for the likes of Elizabeth Warren or Kamala Harris with their preposterous Slave Reparation Proposals.
You don't right wrongs by being stupid, no matter how irritated you migt be at the current politics.
Mike "Mish" Shedlock