The Fed takes pride in its diversity. It a blatant lie and groupthink proves it.
Every month, a parade of Fed governors offer their views on the economy in various speaking outlets. In those speeches, the Fed presidents may seem diverse in opinion but it’s an orchestrated charade.
When the Fed meets to set monetary policy, dissents are measures by months, but by years. The last dissent at a meeting was in 2005.
A Fear of Dissent or Something Else?
WSJ columnist Joseph Sternberg says A Fear of Dissent Haunts the Federal Reserve
A member of the Fed’s Board of Governors dissented from the FOMC’s decision to cut its target short-term interest rate by half a percentage point. Gov. Michelle Bowman would have preferred a quarter-point cut. It’s the first time since September 2005 that a member of the Fed’s Washington-based board has disagreed formally with a policy decision.
The last dissenting vote from a governor before September 2005 came in September 2002, and the one before that was in November 1995.
The FOMC has come to rely for intellectual diversity on the presidents of the 12 regional Federal Reserve Banks. The president of the New York Fed always gets a vote, and the others take year-long turns filling four slots alongside the seven Fed governors in voting on the FOMC. Regional bank presidents cast dissenting votes more often than members of the Board of Governors, but often they cast a lone contrary vote. The last time two regional bank presidents voted against an FOMC decision was in September 2020, when Robert Kaplan and Neel Kashkari disagreed with the wording of the statement but not the policy.
Whatever the reason, this is unhealthy—and dangerous to the Fed’s credibility and independence. Voters might well start to wonder why their central bank isn’t hosting a more open debate about its recent errors and how to remedy them. Meanwhile, if the Fed can’t demonstrate a capacity for vigorous internal dissent, politicians may conclude they must force such a debate on the bank via greater political meddling.
Something Else
There is clearly pressure on reaching consensus. But when and why did this happen?
Contrary to widespread myth, diversity does not have anything to do with race, sex, or where one went to college.
Diversity is in thinking, not race.
Unfortunately, every person on the Fed is trained and believes in the same economic nonsense including the preposterous idea that 2 percent inflation is needed.
Year in and year out they all say the same stupid things about inflation expectations and the Phillips cure.
Judy Shelton Flashback
On January 19, 2020, I reported Trump Nominates Gold Advocate Judy Shelton for the Fed
Judy Shelton is an American economic advisor to President Donald Trump. She is known for her advocacy for a return to the gold standard and for her criticisms of the Federal Reserve.
Please consider Shelton Slams Bank’s ‘Soviet’ Power Over Markets
“How can a dozen, slightly less than a dozen, people meeting eight times a year, decide what the cost of capital should be versus some kind of organically, market supply determined rate? The Fed is not omniscient. They don’t know what the right rate should be. How could anyone?” said Shelton.
That paragraph is all you need to read to understand Shelton is an exceptionally good nomination and far more competent than anyone on the Fed.
Diversity at the Fed Needed
On January 3 2020, I commented Allegedly, There is a Gender Gap in Economics
Instead of more women or blacks on the Fed, I suggest we try actual diversity of economic opinion and not gender for gender’s sake.
What’s most needed on the Fed is an Austrian economist who proposes dissolving it. That would be diversity. Instead, expect more group think nonsense about race and the Phillips Curve.
Good Ole Boy Network
To become a Fed president you have to think, believe, and act like a good ole boy. Janet Yellen is best not thought of as a woman, but rather a good ole boy.
If only Einstein had only been a black or female, his theories would now have had more meaning.
What Happened to Shelton?
At confirmation, every Democrat voted against her. A couple of weak Republican senators did not vote for Shelton. Nobody really wants sound money.
Unfortunately, Trump never pressed the issue. Republicans still had the votes but one one of them got Covid and passage failed by a single vote.
Vice President Mike Pence would have cast the tie-breaking vote.
Inflation Expectations
Every meeting, Fed Chair Jerome Powell comments on inflation expectations. So did Janet Yellen.
Inflation expectations cannot possibly matter because at least 80 percent of the CPI is inelastic.
People will not double up on rent in advance if they think rent will go up. Similarly they will not double up on gasoline, medical operations, etc.
And among the elastic, items people won’t take two vacations this year an none the next if they think hotel costs will rise.
Why Do We Think That Inflation Expectations Matter for Inflation? (And Should We?)
Please consider Why Do We Think That Inflation Expectations Matter for Inflation? (And Should We?)
Mainstream economics is replete with ideas that “everyone knows” to be true, but that are actually arrant nonsense.
The direct evidence for an expected inflation channel was never very strong. Most empirical tests concerned themselves with the proposition that there was no permanent Phillips curve tradeoff, in the sense that the coefficients on lagged inflation in an inflation equation summed to one.
Finally, even if one is willing to entertain the idea that in some vague, mushy sense concern over costs and demand by individual firms facing fixed prices leads to a dependence of aggregate inflation on expected inflation, we are still left with the conclusion that short-run expectations should be the ones that are most important.
One might also be uneasy about policymakers’ relying too heavily on the assumption that inflation’s long-run trend will remain stable going forward so long as measured long-run inflation expectations do. Even if every one of my preceding arguments is judged by the reader to be completely unconvincing, it nevertheless remains the case that we have nothing better than circumstantial evidence for a relationship between long-run expected inflation and inflation’s longrun trend, and no evidence at all about what might be required to keep that trend fixed (beyond that it might involve keeping actual inflation from moving up too much above two percent on a sustained basis).
[Mish note: The last two paragraphs are a direct criticism of Fed policy as practiced by every Fed chair and people dismiss these reports without reading. The next paragraph is a hoot as well.]
Or would you justify the view that expectations “matter” by pointing to the inflation experience of the 1960s and 1970s, even though that period provides no actual evidence that workers or firms tried to boost their wages or raise their prices in anticipation of future price or cost changes?
The Fed study was not only accurate, it was funny, and replete with humorous quotes.
Amusing Quotes
- Expectations are by definition a force that that you intuitively feel must be ever present and very important but which somehow you are never allowed to observe directly: R. M. Solow (1979)
- Pure economics has a remarkable way of pulling rabbits out of a hat. It is fascinating to try to discover how the rabbits got in; for those of us who do not believe in magic must be convinced that they got in somehow: J. R. Hicks (1946)
- Don’t interfere with fairy tales if you want to live happily ever after: F. M. Fisher (1984)
- Few things are harder to put up with than the annoyance of a good example: Mark Twain, The Tragedy of Pudd’nhead Wilson (1894)
Do Inflation Expectations Matter?
I have discussed inflation expectations at least eight times over the years, most recently in How Do Inflation Expectations Impact Wages and Future Consumer Inflation?
Phillip’s Curve Nonsense
Also see Yet Another Fed Study Concludes Phillips Curve is Nonsense
Despite the Fed’s own studies, every Fed president still believes in the Phillip’s Curve and Inflation Expectations.
They have been trained to believe nonsesne.
Irony of the Year
When is the last time you heard any Fed president discuss sound money? Heck, can anyone even recall the Fed discussing M2 money supply at all? Gold?
We have a Fed monetary policy committee that never discusses money, how it’s created, or its role in inflation!
Instead, every month we are treated to an infinite barrage of discredited ideas like inflation expectations, two percent inflation, and the Phillips Curve.
It’s groupthink at its finest.
The Fed does not discuss money for a reason that should be easy to figure out: You have to be brainwashed to be this stupid. And you have to believe like they do to become a Fed president.
Groupthink, not fear of dissent, explains the lack of dissents.
“Do expectations matter?”
In what way?
Expectations on future inflation will not make it so, and that is proven, logically, by two Fed studies, and every month by a repeat NY Fed panel.
That is my point, so a rebuttal by PapaDave is out of context.
Shelter is 36% of the CPI one cannot do a damn thing about that even if expectations are correct.
Factor in gasoline, insurance, etc etc.
Food, OK you can buy a freezer and buy on sale, but one can and should do that regardless of expectations.
Consumer electronic and PC prices fell for years. Under expectations theory no one would buy them.
You can make investment decisions on expectations, but that has nothing to do with belief that consumer expectations matter to the future price of goods. And that is my point!
Sure, everyone can rush out to buy toilet paper or whatever. One month later the price crashes.
There is no evidence inflation expectations matter and tons of evidence that says they don’t.
I guess you have never lived in a country with high and volatile inflation. In fact, price stability is often defined as a situation where inflation expectations don’t matter. If so, you are only expressing your view that the US has price stability. In countries without price stability, inflation expectations are (almost) the only thing that matters.
“In countries without price stability, inflation expectations are (almost) the only thing that matters.”
But it is always and everywhere inflation which drives inflation expectations. Never the other way around.
Stop inflating, and expectations will come down.
While, conversely: No matter how badly you expect inflation: Unless someone actually prints, as in inflates, you won’t have inflation.
Inflation really is always and everywhere a monetary phenomenon, as Friedman stated. Always. And everywhere. Meaning: It is never, and nowhere, the result of mere beliefs, expectations etc.
I think most successful inflation stabilization experiences rely on the expectations channel, especially in the case of stabilizing hyperinflations.
At the root of any “successful inflation stabilization experience”, is stopping the actual inflating, though. Unless you do that, there can be no long term reduction in inflation expectations.
The two do go hand in hand. But the notion that printing is a-ok, as long as some jawboning aimed at supposedly controlling “expectations” is also employed, is at best a very short-term “fix.”
Short term, expectations can for sure massively amplify monetary trends: It is almost a given that once China is finally, and irrevocably, forced off its unofficial dollar peg due to internal strains of maintaining it; such that “everyone” comes to recognize the dollar will depreciate markedly and consistently for a very long time vs the Yuan: It is highly likely that an absolute flood of erstwhile dollar reserves will hit the market in short order, as large holders want to get out while they still can (When all you need to buy is priced in Yuan, a currency depreciating 10%/y against it, is not a good longer-term reserve anymore, no matter how convertible it is…). Resulting in a huge effective inflation of the demand-driving dollar supply, and hence a huge spike in dollar prices for goods and services.
I’ll go one step farther. If everyone holds similar expectations, the best an investor can do is earn the average market return. Doing something else (other than what the market expects) is a bet against the expected outcome. It increases risk, relative to the normal risk associated with the expected outcome. Very likely there there is little to no excess return after accounting for added risk. The favorite in a horse race usually wins. The long shot seldom wins.
An example, buying gold in the belief that there will be a major crash, when the rest of the market thinks the Fed will save them. Buying gold early at a low price creates a the potential for more gain, but at substantial risk. Along with an opportunity cost because your wealth is tied up, without interest or dividends.
While there may be a wealth preservation effect with gold, the potential also exists for excess gain if the crisis unfolds, and people rush for safety. Factor in probability and risk and it might even be a zero return. On the plus side, central banks are buying the stuff. Given that they’re an extended family with more information than we’ll ever have, that trend is important.
Buying gold for a doomsday scenario is like stocking lead. If it ever gets to that, I’m outta here, which among other things, means having gold in 2 or more countries.
What about Bitcoin? If you watch the ups and downs you’ll soon figure out its purely speculative, and the ‘house’ wins.
How many folks here think that during/and or/after this Fed rate cut cycle we will spike to new inflationary highs? The Fed is lowering interest rates right now so the dumbass corporations can refinance their debt that is coming due in the next few years at lower rates so they don’t go bankrupt! -Housing/Stock Mkt at all time highs….time to lower rates, are you Fu*king kidding me!? Get in on the bubble….just get out before it blows.
Mish is absolutely correct!!!!
The problem with sound money is that government is obstructed from endless wars plus endless bread and three ring circuses. In 1971 the gold window got obstructive, so Nixon closed it temporarily, for now over 50 years. The gold window is out of order.
re: “We have a Fed monetary policy committee that never discusses money, how it’s created, or its role in inflation!”
Yeah, they conflate interest rates with money: “when the demand for reserves is relatively strong such that borrowers are willing to pay an EQUILIBRIUM INTEREST RATE”
Bank Reserves since the Start of Quantitative Tightening | St. Louis Fed (stlouisfed.org)
They act as if the “demand for reserves” is inseparable from interest rates::
https://libertystreeteconomics.newyorkfed.org/2022/10/measuring-the-ampleness-of-reserves/
“Why does the quantity of reserves matter? Because the “price” at which banks trade their reserve balances, which in turn depends importantly on the total amount of reserves in the system, is the federal funds rate, which is the interest rate targeted by the Federal Open Market Committee (FOMC) in the implementation of monetary policy”
The money stock can never be properly managed by any attempt to control the cost of credit. Interest is the price of credit. The price of money is the reciprocal of the price level.
:”
Milton Friedman had a k-percent money rule, and a nominal interest rate rule of very near zero percent. Friedman didn’t advocate targeting interest rates.
Note: William McChesney Martin Jr., abandoned the FOMC’s net free, or net borrowed, reserve targeting position approach in favor of the Federal Funds “bracket racket” beginning in c. 1965 (coinciding with the rise in chronic monetary inflation & in anticipated inflation).
As a guide to open market operations the rate was used as follows: a rise in the federal funds rate above the rate triggered open market selling operations. A fall below the target rate triggered open market purchases. Open market operations of the buying type add (costless) legal reserves to the banking system; selling operations reduce free gratis reserves.
The Keynesian technicians in charge of the hour-to-hour administration of open market operations apparently believed that there was, at any given time, a federal funds rate that was consonant with a proper rate of change in the money supply. They plugged this concept into a computer model, i.e., (using a policy rule, or Taylor like rule, i.e., today, the IOeR’s remuneration rate).
What the Fed’s research staff actually “plugged in” was an open-ended device through which the commercial banks could decide whether or not there should be an expansion in the legal lending capacity of the banking system – the capacity to create credit (money) and to acquire additional earning assets.
This assured the bankers that no matter what lines of credit they extended, they could always honor them – since the Fed assured the banks access to free-gratis legal reserves whenever the banks need to cover their expanding loans – deposits.
The time horizon of the trading desk’s policy has been 24 hours rather than 24 months.
Milton Friedman changed his mind when the facts changed, i.e. when the velocity of money started going haywire during the 1970s. He never had a zero nominal interest rate rule.
Thanks. Velocity haywire? You’re talking about the monetization of time deposits, e.g., daily compounding of interest, etc.
Consensus is politics, not science. Advances in science, from Copernicus to Einstein, had nothing to do with consensus or doing “political economy” among a voting private cadre of a private central bank’s officials managing the “free market” economic needs of the empires’ oligarchy. Ditto for the political consensus that climate change is an anthropomorphic phenomena requiring global government by the best and brightest. . .
“Sound money” is completely out of the question when you are already $35 trillion in debt and adding another trillion $ every six months.
In Germany and the US the yield curve middle caved in. In the US 10Y-3M = 3.741 4.672 = (-)0.931. In Germany 2.22-3.08 = (-)0.86. US10Y-DET10Y = 1.51. In Japan all rates are above zero. Japan 10Y is 0.87. The Fed finally eradicated negative rates from the world. By cutting rates the Fed is working in unisom with the ECB and the BOJ.
The spread between their 3M shrank. In Oct 2008 The Fed raided bank
accounts to save the banks. That will not be repeated in Oct 2024, or in 2025. It will be a pariah.
what would the political and federal reserve actions be to this scenario. if an convicted felon Trump tries to break into Veep Harris home, and she shoots him? How does the politics play out. the fed action. the stock and bond and FX markets. A net plus for the rifleman or a net plus for the bloody ear victim…………?
Trump would never do that. He would send someone else. Take his first wife Ivana. She “fell” down the steps in her home and died. Maybe he got some tips from his buddy Putin.
His other buddy, Musk, posted on X, “how come no one has tried to assassinate Harris yet?” Then tried to claim it was a joke. Just like Trump always does after saying something inflammatory.
Calling the proud boys. Stand by and stand ready.
I mostly avoid politics, and I never vote, but I am wondering how big the riots will be and how many more will die if Trump loses again. It could be quite the show.
Dems lose, cities burn.
Repubs lose, patriots get framed in DC.
Patriots! Lol!
Have you got your guns and ammo ready? Maybe I will see you on TV!
– The Fed takes pride in its diversity. It a blatant lie and groupthink proves it.
> They must have “Group Think” because there is no way that you get 100% across the board Approval, on such “Diverse” Issues, and with so many avenues that could be taken. This would and should require months and months of work, papers, an abundant number of proposals from the start should have occurred, to stop “Group Think” from occurring! The solutions to our Nations Problems, albeit self inflicted over the past 3 1/2 years, but I digress… are not simple, gather up 20-30 people and let’s roll something out next week.
> These are extremely convoluted, very mixed together in many cases, with so many variables, you can’t possibly just solve this, but rather Discuss, Plan, Discuss Again, Plan Some more Etc…
> Shall we mention the amount of cowering pansies in our mix of supposed Legislators? The “Go Along to Get Along” Crowd of Puppets, Sheep, Yes Men & Woman, give me $ and I’ll look the other way Group ETC. Many of these people Must Go!
> Doesn’t this, in some way, out the Fed as “Carrying Water” for the Party in Power? Maybe a specific party, and they toss
roadblocks up until their party is back in power? Something must explain the nonsense… OR is this simply The “Good Ole Boy Network” Hard at work as usual…
The opposite of group think is critical thinking, the essence of which is an open mind. In today’s world that is a rare commodity.
Unfortunately your correct…
To illustrate further the fragility of the US banking system, a recent study by Florida Atlantic University found that 94 US banks face a significant risk of bank runs. These banks all have a ratio of uninsured deposits to total deposits of 50% or higher, meaning they lack the hard currency to cover withdrawals in a panic. The University’s Liquidity Risk from Exposures to Uninsured Deposits index reveals that BNY Mellon and John Deere Financial have a 100% ratio of uninsured deposits. This is followed by Deutsche Bank Trust Company (97.3%); State Street Bank (92.6%), Sumitomo Mitsui Trust Bank (92.1%) Northern Trust (73.9%), Citibank (72.5%), HSBC Bank (69.8%), JP Morgan Chase (51.7%), and US Bank (50.4%).
https://themacrobutler.substack.com/p/from-too-big-to-fail-to-too-big-to
The takeaway from this is … central banks are using desperate policies to keep the global economy from collapsing … and cnnbbc will not be revealing any of this
Guess who you put on the short list? Include a few precipitating factors… relative size of commercial real estate loans, relative size of auto loans, issues own credit card…
Close to half of US bank deposits are not insured. That’s not a puzzle if you think about the size distribution of deposits. The real puzzle is why people keep $15 trillion at sub-market interest rates in banks given the alternatives they have.
I am shocked that this has only received one up vote in the last 5 hours. Some people on here want investment ideas. You lay out a classic–btw, shorting (bad) banks was banned in 2008. At the time, a hot list of candidates was available through Nouriel Roubini’s blog. The accuracy was uncanny, and the method was relatively simple.
If I was inclined to bet against the Fed bailing them out (again), I’d be shorting some of the above banks.
Probably because Fast Eddy is the boy who has called “wolf” for many years here. He is always posting links to stories of imminent doom.
But he never offers his own opinion or make any investment suggestions. He just likes doom and gloom.
In the fall of last year he was posting how Permian oil production would begin a dramatic decline in 2024, causing oil prices to spike and the economy to crash. But he never recommended any investment to take advantage of this impending doom.
All this year, he has repeatedly posted stories from other sites about the coming decline in Permian production. Which still hasn’t happened. Still no investment recommendations either.
When I asked him last week about the Matterhorn pipeline coming on stream and whether it will result in increased production from the Permian, he responded with links to old articles from other sites. He never wants to give his own opinion or any investment recommendations. So most people just ignore him.
Thank you. I hadn;t realized. I just checked his posting below. Quoting entire articles without quotation marks is plagiarism of the worst kind. It would normally result in dismissal, Citing the source is NOT sufficient by itself. Citation with out quotation marks is acceptable when general ideas are referenced, and not actual word-for-word copying. The same rules apply to quoting oneself,
Still in question is when a specific point is being made and the source was AI, as in my recent posting about cycle analysis.
Unlike you and others here I do NOT give specific investment advice, My reason is simple. There is no learning involved. Lazy minds are part of the problem.
With this being a blog, with anonymous commenters, I can actually forgive FastEddy for not using quotes. We all gather data from many sites, without referencing every single site. At least he usually references his source so you can see that he often copies the entire article.
I have taken advantage of investment advice provided here in the past and my goal is to pay it back with “some” info about what I invest in. No one is obligated to follow what I suggest, though a few do. I hope that they do well with my suggestions.
And you are not obligated to provide investment advice, though I am often interested in other investors ideas.
That’s one of the two reasons I read this blog. For Mish’s excellent analysis, which I very much appreciate, and for some investment ideas.
While last Thursday was the first time 10-year yield rose after a 50-bps cut since Lehman, some may call it a coincidence, but those who understand history know that nothing happens by chance in this world and that everything in life is governed by cycles, just as night follows day, the economy follows a business cycle. Therefore, it should come as no surprise that it was on September 18, 2007, that the FED, under Chairman Ben Bernanke, initiated the interest rate cut cycle that ultimately marked the onset of what has been historically referred to as the Global Financial Crisis.
However, the Federal Reserve Bank of New York’s Q2 household debt report already revealed rising delinquency rates, particularly in auto loans and credit cards. Delinquencies for both are now at their highest levels since Q4 2010, following a similar rising pace not seen since Q2 2008, just before the Global Financial Crisis.
These are literally UBS’s words, and from what anyone can understand, this means that the $8.4 billion amount isn’t entirely equivalent to interest earned on loans. Doesn’t this imply that UBS is earning even less on its loans? Furthermore, doesn’t it suggest that UBS is being supported by central banks and other banks to fill the growing gaps in its balance sheet?
https://themacrobutler.substack.com/p/from-too-big-to-fail-to-too-big-to
Auto loans and c/c delinquencies are rising by borrowers with Fico 630 and under. Cutting rates help all borrowers, including the US gov. Since Q2 2022 CL is falling, in rolling hills, without interruptions. Since Q2 2022 XLE is rising in an Ending Diagonal Triangle, feasting on DUCs. When the DUCs party will be over XLE either start a recession or breakout building a new bubble. Money will flow from T-bills and overextended bank accounts, that risk many banks, to industries, increasing output and productivity. After a correction the Dow might takeoff in a sling shot.
There is a possibility that the Fed cut 0.5% to help itself. Currently with over six trillion in Treasuries and Mortgage backed securities on the $7+ trillion balance sheet-let’s assume the majority is from recent years with near zero interest rates.
Do the math on a security paying 2.5% over 20 years, when yields go to 5% This is an oh-fudge moment if you want to unload now, or in the near future.
But let’s be clear–ultimately it is NOT good for the borrower. The problem with bailouts is there is NO LEARNING, except the next time… to expect another bailout.
Isn’t this the same Judy Shelton who headlined Modern Monetary Theory?! Now she’s a gold bug? I believe she just wants a paying job.
Judy Shelton has nothing to do with MMT
You are confusing Judy Shelton with Stephanie Kelton!
https://www.realclearmarkets.com/2020/11/02/stephanie_kelton_is_the_mmt_opposite_of_judy_shelton_582648.html
We mentioned the devil’s name (Stephanie Kelton(infinite money supply as long as we have the reserver currency))?
I don’t want to get cursed, so I’ll do my part, “Hail Satan!, MMT FOR THE OPTIMAL ECONOMY! INFINITE MONEY PRINTER!!! BRRRRRRR”
The Hasidic Jews in Monsey NY, who look like Nasrallah, support Trump bc they aren’t as stupid as CA progressive Jews. Zhey don’t watch tv. When zhey fly to Asia muslim travellers tell them where to buy halal food. Maybe zhat’s why Nasrallah is still alive.
you could make our central bank just be a clearing house for checks and wires and make the currency creation an agreed on formula, automatically say 1 or 2% per annum distributed to all americans, like soveriegn wealth funds like alaska and others around the world does…… the bankers now get all the money creation first and for free and sometimes they even get payed to borrow…… it’s really not complicated, it’s just now a scam. of course this has zero chance. i’m sure some states will mouseclicktheir own currency in near future. like the 1800s. CA and TX and FL andNY dollars……….ron paul lays it out…….in his books and lectures.
Flea brains could do a better job. A better idea is money is added to the economy as real growth occurs–since real growth actually produced things of value. The Keynesian crap of forced inflation stimulating sales needs to die.
“Diversity is in thinking, not race.” – Mish. Well said. Absolutely, spot on.
waiting for a few words from u
Ein, zwei, drei! Yeah, FOMC members get their marching orders and in between, they are clipping coupons. Now, meltup, bubble-er-licious, pop and its all but the crying. Same as it ever was. Either it works to push the moron K. into the WH (doubtful) or it saddles a Trump Presidency with the pop.
The Good Ole Boys and Girls supported Kamala Harris.
Trump appointed Chairman Powell (a Republican and the most influential member of the Fed), and four Fed governors. He then publicly bashed them many times for not helping him more.
That seemed to happen with many of his various appointees throughout his term.
I guess he should have appointed every one of his wives and children instead. They probably wouldn’t have helped Kamala.
Eric could handle it, but not Don, Jr. (Fredo). Hopefully he’ll keep Ivanka and especially Jared Kushner the F away from the White House this time.
Well, he could have also appointed some of his porn stars and hookers instead of Don, Jared and Ivanka. They would have done what he wanted if he paid them enough.
Kudos! Shelton could’ve been the proverbial breath of fresh air. The Senate derailed her; however she also switched her position on monetary policy from tight (Obama) to loose (Trump).
The best thing that could happen to the Fed is make them an advisory panel to guide Congress, after replacing all the Keynesians, of course.
You want Congress to decide monetary AND fiscal policy?
What do you think laws and spending are but decisions on m&f policy? Short of a competitive market approach, at least Congress can be held accountable by the voters.
Does it hurt to keep twisting your words so you end up like a pretzel?
Congress, fiscal.
Fed, monetary.
Well, excuse me. I think of it as a interrelated system: what you want to do, and how you pay for it. ‘Fiscal’ and ‘monetary’ are simply ways of pointing the finger. They are fundamentally joined at the hip. Fed independence is a fantasy..
Fiscal: Of or relating to government expenditures, revenues, and debt.
Monetary: Of or relating to a nation’s currency or coinage (and ‘money’ generally).
Here’s an idea. Leave the Fed in charge with 100% decision authority. However, when they get it wrong, they get beheaded.
The problem with the Fed is there is NO DOWNSIDE. Meaning there is no responsibility.
So what? Behead them then. I don’t care. I just accept that the fed exists and they are going to do what they do.
But I don’t waste my time on a blog thinking that they will pay attention to anything I say, let alone follow my recommendations. That’s delusional.
I actually think only about 80 percent of FOMC decisions on the Fed rate were unanimous over the last 25 years.But if you want more dissents, you can adopt the Bank of England model (4 of the 9 MPC members are external to the BoE); as a result, only about 50 percent of BoE rate decisions are unanimous. As far as I remember, disagreements in committees usually arise about easing of policy, and much less about tightening or keeping rates unchanged.
Do expectations matter? Yes they do.
Having expectations about how things will go is a natural human instinct: we are literally wired to want to know what’s coming.
It’s why Mish does all the economic analysis he does. Because he wants to know what’s coming economically.
It’s why I do so much analysis of companies and their stocks. I want to know if I can expect a good return on my investment.
It’s why so many investors follow every release of another inflation number and then adjust their investments to compensate. Everyone wants to know what’s coming.
And before the next inflation number is released, you will see hundreds of interested parties express what their “expectation” for that number is.
Expectations do matter.
In recent years, I’ve switched from risk-based ‘expectations’ to the Ancient Greek (Stoics) practice of Premeditatio Malorum. Prepare for All Evils.
Expectations are predicated on a set of of assumptions about the future. At its most refined level, prediction considers risk –the ‘expectation’ is presumed to be the ‘expected value,’ which is the mean of a probability distribution. Think about that. You have dozens of factors influencing your investment, some related, some independent of other factors. Somehow, you will integrate all those factors into a decision to buy, sell, or hold. Then, the absolute best you can say is ‘I have a 50% chance of getting higher than x%, and a 50% chance of getting lower.
Slightly better is optimistic, realistic, and pessimistic scenarios, but then you don’t have probabilities. You do have an idea of how good or how bad the investment might be, and what is most likely to result.
The next step is a Monte Carlo simulation–risk-based expectations. Depending on how the factors are integrated into the simulation, you can get crap, or real insight, and hedging takes on a whole new meaning because a hedge truncates the probability distribution of returns. Done right, you can plot risk and return from the simulation and compare to the market risk-return tradeoff.
The problem is you are still dealing with risk, not uncertainty. The difference is profound–you can assign probabilities to risk–the normal variation of a factor over time. Uncertainty? Who the f**K knows? It hasn’t happened before, or it is simply too complex to grasp likelihood.
That, IMHO, is where we stand now. A world swamped with faux debt, without a true risk-return tradeoff, complications like derivatives, computer trading, etc, and a less-than-competent team at the Fed. To me, that means prepare for all evils. Think of the worst case and plan accordingly.
What is a Black Swan? A low probability event with an extreme outcome (good or bad). It also applies to an uncertain event–no probability can be assigned.
Having certain expectations helps simplify one’s life.
For example, if the weather forecast is 100 degrees, and zero chance of rain, do you still go outside with a winter coat, boots, and umbrella, just in case?
Have you seen the recent weather in Europe?
https://www.euronews.com/2024/06/20/extreme-weather-ravages-europe-with-record-heat-and-severe-storms
This is a low probability, high impact event,
Yes I have. And, thanks for giving an example that demonstrates my point. A low probability, high impact event that was forecast days in advance so people could properly prepare because they knew what to expect.
However, if weather forecasters told YOU it was going to be 40C (104F), YOU would still prepare for -40C with winter apparel, just in case, because you want to prepare for ALL possibilities.
And of course, climate scientists have been telling us for years now that we can expect a lot more of these former low probability, high impact events, as the climate changes due to global warming.
And insurance companies are raising premiums or even refusing to insure in some areas because they expect more of these former low probability, high impact events.
Right?
Mr. Vaccine does.
does WHAT?
It seems you’re another person who doesn’t understand decision making under uncertainty–incomplete information.
What was fundamentally evil about Covid was a) forcing people to be vaccinated, and b) limiting access to certain information. c) effectively brainwashing the populace.
That said, failure was never so evident: a gov’t controlled society unable to understand the consequences of certain actions, and limiting the intellectual capacity of others. It reflects on those in positions of power, and those who influence opinions–the media. It also reflects on the People who subsequently failed to demand responsibility from their govt.
However, by far the worst is the complete disinterest in post-Covid review. There is NO LEARNING about what to do in such situations if/when they arise in the future. For example, did the US Dept of Education do any ‘best practices’ analysis?
PapaDave’s comment is a great example of NOT understanding why ‘preparing for all evils’ is important. What do you carry in your car in the event of a) major traffic delay, b) a crash involving you c) a tire blow out d) a fire under the hood e) a Richter-7+ earthquake, or equivalent destruction.
Depending on what’s in your car, you might survive E!
Lol! Keep trying to justify your “prepare for ALL” possibilities. When what you are really doing is preparing for the “most likely” possibilities that you might expect. Which is what we all do.
What do you put in your car to prepare for the earthquake, hurricane, tornado, nuclear attack, falling space debris, highway sniper, bridge collapse, baseball sized hail, etc. Not to mention the millions of other possible events? Gotta prepare for them ALL, right?
You still don’t get it. In all of your situations there are common needs. And specific non-common needs–a Geiger counter for example. Without it, all your money won’t save you in a nuke strike
My POV–it makes sense to have in my car, for example, a first aid kit, fire extinguisher, multi-tool knife, water, hammer to break auto glass, walking shoes, space blanket, visegrips.
No. You said you want to be prepared for ALL possibilities. But what you are actually doing is preparing for the most likely possibilities, which is what most people do (including me).
So, you are agreeing with me, but you are too embarrassed to admit it. And you probably never will. So you will keep telling me that I don’t get it.
I must add “true expectations” matter. Many decisions in our lives are based on expectations. As you eluded too, we are wired this way (I dare say Woman more than Men in my experiences). False, misleading and/or misrepresented expectations can be devastating to those making decisions based on such. Politicians are very good at misleading people, into decisions that they may not make otherwise (Ex. What to Invest in).
This is obviously the reason to do Your Own research, and gather your own expectations to match up with what you read, hear, and choose to explore as options. Better choices are made with proper analysis, and not ruling anything “In or Out” until you have reviewed all of the data. Does it take time? Yes, but time very well spent!!!
It is true that more information is better than less information, but information has a cost, at a minimum your time to collect and analyze. Good information is usually not free, and if is, everyone has access, so any advantage is limited. This is why insider trading is illegal. Also, as you point out, information varies in accuracy. Do research by all means, for your own peace of mind, but unless you have special skill in interpreting it, good luck. You’ll need it.
Essentially, small investors are playing against the very informed, and qualified information analysts of Wall Street. Unless you have some unique capability, you are only marginally better than a Cramer investor.
I should add that Mish has that capability IMHO, which is why some of us are here.
Yes. Everything has a cost. And preparing for ALL eventualities has the greatest cost.
And yes, I am here because Mish does some of the analysis that I don’t have the time for, and can’t be bothered to do. Which saves me time and money. And helps me hone my expectations of what is to come.
To be clear; currently, I effectively prepare for the worst outcome, just as I prepared in 2007, btw. By 2009 I was able to retire comfortably, and did. I expect to do a little better than survive the next time, too. As a generality, your chances of success/survival increase with preparation.
Cervantes put it thus:
‘Forewarned, forearmed, to be prepared is half of the victory.’
Yes. It is also why I avoid listening to what politicians say and focus on what they DO (the legislation that they pass) instead. Being political is a HUGE waste of time.
Can’t agree more with this comment. Too many people get too much entertainment value out of the words, but it makes good business for media companies.
Thanks!
“Do expectations matter? Yes they do.”
In what way?
Expectations on future inflation will not make it so, and that is proven. That is my point, so your rebuttal is out of context.
Sorry. Especially after you supported me earlier today. I “Respectfully disagree”.
People’s expectations of inflation can indeed make it a self-fulfilling prophecy.
Germany. Early 1920s. Inflation getting out of control. Workers would get paid weekly, then daily and rush out to spend it all today because tomorrow it would buy less. Which only helped exacerbate price increases. Eventually, workers started getting paid twice a day. Workers wives or family members would come at lunchtime to pick up the days first pay and spend it before the end of the day, because it would buy more than the second pay at the end of the day. An extreme example, I admit, but it actually did happen.
Today, if people expect inflation, they will often try to buy assets that might appreciate such as gold, bitcoin, real estate, etc. And the more of them that do this, the more it pushes up the price of that asset class. Housing is a good example, particularly when “bidding wars” happen. Psychologically, people are desperate to get in NOW, before the price runs further away from them. Which only serves to push up prices faster.
Living in a very expensive area for housing, I agree that expectations do matter. When someone believes housing prices will go up, they will stretch their finances to buy a house before prices climb higher, and they are “priced out of the market.” When prices fall, they will hunker down, and make do until they see a buying opportunity. As Mish has stated before housing sales drive many other costs, from the raw materials used to build, to appliances, and service companies like home inspections and moving crews.
Bullard dissented in 2022, didn’t he? https://www.stlouisfed.org/on-the-economy/2022/mar/bullard-explains-recent-fomc-dissent
The media seems caught up in this narrative and spin. But I agree, diversity of opinion matters! The system only allows promoted individuals from within, whom have been through the same ‘conditioned’ thinking process.
Correction: The difference is governor vs regional president – https://www.reuters.com/markets/rates-bonds/fed-bowmans-dissent-is-first-fed-governor-since-2005-2024-09-18/
Governors are permanent positions so less likely to dissent as they are formally appointed by the President of the USA
Bulltard. Ah, that’s nostalgic.
Mish, when I was in history class, there was all this talk of using silver as money because of a lack of gold. Apparently, the lack of gold was interfering with a needed rise in the money supply. I was taught the argument for silver went away once there was a gold rush in Alaska. So maybe the Federal Reserve is not perfect, but it would seem to me that having a bunch of supposedly smart people making monetary decisions is better than an arbitrary gold find.
I get what you mean by a lack of opinion diversity. I have seen even larger government agencies where I swear the only function of those working for said agency is to agree with its leader. I guess the belief is if you have 200 idiots screwing up, it looks better than just one. Elon Musk laid off all those “workers” at Twitter and Twitter became IMO a better experience. I cannot even imagine how much dead weight there is at the federal level.
That aside, everyone criticizes the Fed and yet I have not seen anyone propose a better model. In fact, other nations use dollars and turn their money supply management over to our Fed. Do you have a better model? Or are you just saying you could tolerate the Fed if there was more dissent and diverse points of view? I would like to see dissent as well, but sadly, dissent today politically is almost seen as pure evil.
A better model…
if we could solve the problem of collateral, debt could be traded like stocks, on an open exchange with buyers and sellers from around the world. Likely, it would be more like Lloyd’s of London selling insurance, with open pricing. Information would flow in, lenders and borrowers would react and price/interest rate/yield would adjust. The goal–to be as efficient/competitive as possible.
The Fed is Soviet Union planning of the economy.
I have discussed a better model countless times.
Replace the Fed with NOTHING.
Let the market set interest rates
I am willing to try that Mish. But I have two reservations; one, it will never happen; two, it won’t make anything better. There were just as many economic problems before there was a fed.
However; hypothetically, if somehow we DID get rid of the fed, and let markets set interest rates, and then everything goes to hell, would you advocate to bring them back?
No – There is no need for a Fed.
I am pretty sure you know the risk.
One thing worse than the Fed would be a president who controls money supply and interest rates.
I understand some of the risks, but I candidly admit I do not know them all. But, as I said, I would be willing to go with no central banks at all. I feel confident enough to take advantage of whatever happens.
“One thing worse than the Fed would be a president who controls money supply and interest rates.”
Wow! Completely agree with that. Even I would be buying gold and bitcoin if that happened.
Since the Fed was born in 1913, the value of the dollar has declined 97%. Couldn’t a random group of 12 cats make better decisions than the Fed? Asking for a friend.
Better cats than dogs, which have a low attention span, especially with squirrels
If there’s even any cats or dogs left with these Haitians running around.
Such comments never make sense to me – and should not to others, in a real way.
So I guess you’re saying a ‘dollar’ can only buy 97% of something – like a candy bar – as it could in 1913. OK. But why are you focused on such meaningless comparison? No one makes the same wages as they did in 1913. A comparison of what today’s median pay for an hour’s worth of work compared to 1913 matters (why don’t you provide them?). And should be compared to ‘real’ terms. And it’s pretty clear the amount and quality of real education and healthcare is way higher a century later. The majority of people now have bigger houses (they presumably want), A/C and heating, better public sanitation facilities, more personal car ownership, access to Social Security insurance, and on and on and on.
Do you really want to return to 1913 living standards? If you don’t like how the Fed operates (upon Congressional law), so be it. But the assumption we are so screwed based upon its operation (and your faux 97% ‘value’ calculation) is silly
Agree. Well said.
What he said was nonsensical garbage spoken right out of his ass.
Poppycock.
Houses, modern HVAC, indoor plumbing, large flat-screen televisions, and personal computers don’t owe their existance to the Fed’s existance.
Tenacious D corrected your misunderstanding of what a 2024 dollar buys relative to 1913. I’ll add that the United States produced a half-penny for over 60 years before being eliminated. Over the past 60 years most/all copper and silver has been reduced from coinage. Perhaps you’re fine with the Romanesque decline of the currency, but it doesn’t end well.
Another dumb f*ck. Currency is just a medium of exchange that facilitates transactions.
If you get paid $1 for an hours work and that $1 buys you a pound of butter is the same as if you get paid $30 for an hours work and that $30 buys you a pound of butter.
What is important, is what can you buy with an hour of work. Compare what an hour of work would buy you in 1913 with what a hour of work will buy you today. And today you can buy a lot more.
The error you are making is that you are viewing the currency as an unchanged dimensionless unit when, in fact, the dollar circa 1913 isn’t the same as the dollar in 2024.
In 1913 $1 was roughly 1/20th oz of gold, whereas today it’s closer to 1/2000th. Post-1934 is a different story.
Incorrect. I am viewing the currency as an ever-changing unit. And it doesn’t matter how that unit changes over time, as long as those changes favor the worker. Which they do. You can buy more today with an hour of your labor than you could buy in 1913. It does not matter how many units of that currency you get in exchange for your hour of labor.
The error you are making is in equating currency to gold. Gold is not a necessity of life. Food, shelter, clothing, etc are some of life’s needs. What matters is whether people can afford life’s necessities in exchange for their labor. The currency is just a medium of exchange to facilitate acquiring those necessities.
And a worker today can afford far more of life’s necessities than a worker in 1913 with an hour of labor.
No, he is saying the dollar buys 3 cents of what it bought in 1913. The loss in purchasing power has been stolen – invisibly taxed – through inflation. It has been stolen at a slow rate over time, and people have been dumbed down over the last 100.years such that they can’t even diagnose what is happening. The elite have skimmed off the top, through the Fed, the benefits of technology, increases in productivity, etc. that increase our standard of living. Like a tapeworm skims nutrition from your digestive tract. “Real terms” doesn’t mean shit. Your question about returning to 1913 living standards is absurd. You don’t know what the hell you are talking about. Which was apparent from the 2nd sentence where you highlighted your reading comprehension problem. The 97% loss in purchasing power “calculation” is not fake. It is based on a stable form of money – gold. When the Fed was created, an ounce of gold was equal to 20.67 dollars of US currency (Federal Reserve notes). Today it takes 2,622.40 dollars to buy an ounce of gold. That is a 99.212% loss of purchasing power of the Federal Reserve Note. ***BY DESIGN***
Your hubris clearly shows.
Lol! What a dumb f*ck. Do you actually believe Americans were better off in 1913? Our standard of living is so much better today than back then. And that is what matters.
The average American salary in 1913 was just $687 per year which equates to $16,063 today. And they had to work between 54 and 63 hours per week, to earn that $687 per year.
The actual average today is $59,584, which means people earn 3.7x what people earned in 1913 in real terms. And the average work week is only 38.7 hours per week.
It’s not about what you can buy with each dollar that matters. It’s about what you can buy based on each hour you work that matters.
Which means that a person can buy 5x to 6x as much for each hour worked today as they could in 1913.
What is with the non-sequiter ‘standard of living’ talk? The initial comment was about the devaluing of the currency.
“It’s not about what you can buy with each dollar that matters. It’s about what you can buy based on each hour you work that matters.”
You overlook factors such as a much larger percentage of income being dedicated to taxes (local/state/federal, property taxes, et cetera), a greater nominal spread between low/high incomes today vs 1913 which skews the median/average up), paying for child care outside of the home, et cetera.
The average person is certainly more comfortable today than 1913, but they are definately not able to buy 5x to 6x per hour of work.
Nope. Not only can they buy much more of the same things (even after taxes) than in 1913, they still have lots left over to buy a plethora of items that didn’t even exist in 1913.
In 1913 there were 0.013 cars per person while today there are 0.85 cars per person. 65x as many cars per person today. And each of those cars is dramatically better than in 1913. And each one of today’s cars costs LESS than a car from 1913, in real adjusted dollars.
“And each one of today’s cars costs LESS than a car from 1913, in real adjusted dollars.”
Clearly you haven’t shopped for a new vehicle or you stick to base model sedans because last year’s fleet average in the U.S. was 47K. It is not debatable that the vehicles are dramatically better (safety glass was a terrific advancement!). Of course servicing and repairing a modern vehicle is much more expensive than an old jalopy.
https://detroithistorical.org/learn/encyclopedia-of-detroit/model-t
“In 1909 a new Model T cost $850, but by 1924 the price had gone down to only $260. The average assembly line worker could purchase one with four months’ pay in 1914.”
Lol! The average cost of a car in the US was $2000 in 1913 which was 3 years wages. But I will let you lowball the cheapest ever model T from 1924. Four months pay to buy one.
Now let’s compare apples to apples.
You can build a complete model T from a kit today for a little over $10,000 or two months wages. Mass produced in a factory would be less than half of that; perhaps $4000 to $5000. Or one month’s wages. Much cheaper today than in 1924.
For comparison, here are some of the cheapest mass produced cars in the world today. All of them have more features and a better ride than a model T. But they are bare bones like the model T.
Prices in US$.
Tata Nano: $2000
Datsun Redi Go: $3000
Renault Kwid: $3400
Maruti Suzuki Alto: $3500
Chery QQ4: $4100
Hyundai EON: $4200
They can all be purchased for less than a month’s wages. Though most Americans would not want any of them. They want their automatics, cruise control, infotainment units, seat belts, air bags, defrosters and heaters, air conditioning, gps, safety features, trailer hauling, seating for 6, seat warmers/coolers/massagers, etc etc etc.
The quote was a bit confusing and I had to re-read it to catch it. The 4 months’ wages was in 1914, the $260 price was 1924 after mass production was at its peak. I don’t know a wage in 1924, but with the 70% nominal drop in price I’m inclined to believe it was one month or less for a line worker to afford one at that point. (acknowledging that the line worker’s wage was greater than that of the average worker across the country)
Regardless, this was close to cutting-edge technology for the masses (plenty of horses and beasts of burden used during WWI). I’m not saying anything about the vehicle standards then vs. the standards no as there is no argument about ride quality or comfort. (again, I am awestruck that there used to be plate glass windows on motor vehicles)
I appreciate the list of vehicles, but the wages for the Model T were for the local population and so not equivalent to contemporary global trade. You’re quite correct the average American won’t want one (and may not fit in it either ;). Haven’t seen a Datsun on the road in many years ’round these parts.
I agree with PapaDave that the dollar has not lost 97%
Do you really want to buy a 1913 car?
Are the components of a new car the same?
Thank you.
Your rant shows you don’t think more than surface level either.
Sure, if you were born in 1900 and decided as a pre-teen you were not going to buy a dollar’s worth of gold but stick it under your mattress instead. And then woke up from a coma 125 years later (today) and try to buy gold instead, yes you can’t purchase as much gold because the ‘value of your (100-year-old) paper dollar decreased’. But that’s a ‘faux’ value argument/comparison, because WHO DID THAT?
If instead, you spent that dollar in 1900 investing in the stock market – in the ownership of real companies receiving real dividend payouts over time – the ‘real value’ of your life and its purchases over time has not decreased at all. You are better off – on average.
That’s why this incessant ‘value of the dollar’ arguments against the Fed don’t make any sense to people that look at the real quality of their life over time.
And I won’t even include the statistics that show the variability of inflation has drastically dropped in the last century (since the Congressional charter of the Fed), compared to the century before in the US. That makes risk-based investing in the long term so much easier for businesses and individuals – which again improves most of our lives.
The big difference between now and then is most families require two incomes to survive, and many more people are 100% dependent on welfare. That we better off today in material ways is obvious, but why? Productivity (technology, education etc) has increased dramatically and global competition delivers superior goods/services at lower real cost.
The systemic failure is two-fold:
1) The creation of faux debt–debt not created by saving the excess of income over consumption. Why is this important? Because faux debt has NO OPPORTUNITY COST. You can ‘make’ as much as you want by adding zeroes to balance sheets. The result, no accountability, no need for rewarding merit, or productivity… just print the crap.
2) The break down of competition with a Soviet-style controlled economy
If you don’t understand why 1 and 2 rate as systemic failures, you soon will.
“you soon will”?
The Fed has been in existence since 1913. Congress has been running annual deficits – on average – over this century+ period. And US merchants and consumers have been buying foreign goods since before that. And by your own acknowledgement, the US productivity has – on average – increased over time.
So what is so ultimately different now, that I need to spend my nights in cold sweats?
Nope. You just keep ignoring the main two points here.
1. The value of a currency does not matter. Because currency is simply a medium of exchange. All that truly matters to each individual is how much they can purchase with what they earn for each hour (or year) of work they do. In Japan, the average annual income per full-time worker is 6,500,000 Yen. In the US it is close to $60,000 for a full-time worker. Very different numbers. But what counts is what that income will buy you.
2. And these numbers are per worker (not per couple). So an individual worker in 1913 earned $687 per year for around 3000 hours of work (23 cents per hour) . Today, an individual worker earns around $60,000 for 2000 hours of work ($30 per hour). All that matters is what those incomes will buy you. It doesn’t matter what the value of the dollar is.
To try to say that people are 97% worse off today because the value of the dollar has changed over time is just stupid.
The Democrats couldn’t pack the Supreme Court, but Biden certainly packed the FOMC. That 50bps rate cut was a joke, but not as much as the phrase, “Federal Reserve independence”.
Lol! Trump appointed Chairman Powell (a Republican and the most influential member of the Fed), and four Fed governors. He then publicly bashed them many times for not helping him more. Because he “knows” more about the economy than any of them.
100% true.
What a refreshing dissent and hope it doesn’t ruin her career. Not surprised that it took a woman to go against the hypocrisy and good ole boy network at the bureaucratic fed.
These are the same creatures that populate the entire government. They must drink nuclear waste because somehow they live forever.
Raising or lowering the interest rates does nothing when you print trillions of dollars more than you take in.
When you have that much currency floating it make the dollars worthless, and then it all flows back into the businesses and banks.
They lock that into bank accounts and skim the interest. The rich have no other choice but to spend it on real estate, and equities, etc. Hence the never ending appreciation.
They can drop millions into stocks and pump them and don’t even care if they lose because they just write it off. Overpay 100 percent for real estate? Buy it all.
The truth is that the slave classes want to be slaved. They deserve it.
Light a cigar and enjoy the show.
so true. i was in russia in the90s. the young loved the freedom. over 40 or so couldn’t handle being free. they begged to go back. i saw marches in red square with old hammer and sickle flag of 40 and 50 and 60 year olds screaming to go back………..
This is the end result of brain washing–establishing values and perceptions that are almost unchangeable. BTW, religion, and most governments do the same thing.
Lack of diversity? Reminds me of Ruth Bader Ginsburg’s clerks while on the DC court of appeals and SCOTUS. 151 clerks – only 1 of whom was black – and he is about 1/8 black. Libs didn’t know their hero was such a huge racist. Or did they?
Maybe it was merit based and not racist.
Oh no you di’int.
Let me think about this. Um, maybe Ruthie could hire as many 140 IQ, law-review Jewish Ivy-League grads as she wanted–trust me, these are the people you need at the Supreme Ct level. If she searched high and low, she might find one or two black graduates with the same qualifications.
Is it any surprise that many now are fed up— with what are fed— by the Fed.
If one doesn’t share an institution’s agreed policy framework, what’s the point of trying to shape policy decisions within that institution? I would prefer that Judy Shelton teaches Trump some basic economics about import demand and supply elasticities. Then we wouldn’t be in a situation where 40 percent of the country believes in Trump’s complete idiocy that import tariffs are not taxes on Americans.
Meh. Presenting a united front doesn’t mean there isn’t a diversity of thought. It’s just the culture of the institution. We have enough food fights on display in politics already.
That’s true only for governors. If you include FOMC members and Fed presidents, you get a much different picture. Public facing comments by governors don’t necessarily equate to the conversation behind closed doors.
https://www.stlouisfed.org/on-the-economy/2014/september/a-history-of-fomc-dissents
80% of the Fed (power) is controlled by 20% (of the top). Sound familiar? It’s a theme across many things and the Fed will be no different.
I’m glad you covered it