Observing the chaotic state of our economy, primarily influenced by central planners, comes with its own set of challenges. Strained necks and weary eyes are common complaints, alongside the lingering disbelief at the bizarre initiatives introduced to steer us back on course.
Among the less visible consequences are the etched lines of stress that settle on our foreheads and the nighttime grinding of teeth. A notable regret for many might be not having invested in Amazon shares, although, in the long run, this may prove to be a silver lining.
Clearly, scrutinizing the current execution of America’s monetary and fiscal policies can bring about certain advantages. It fosters a healthy skepticism towards politicians and public officials, sparing us from any feelings of regret over our voting choices. Since we didn’t support President Obama, we are spared the burden of conscience that accompanies such decisions.
Additionally, there’s a sense of dignity that stems from resisting the latest societal trends. The illusions behind movements like the Tea Party and Occupy Wall Street were evident, and we can take comfort in not having been swept up in such fervor. It’s worth recognizing that these are merely some of the tangible benefits we accrue along this journey. There are also subtler rewards worth contemplating.
For instance, a distinct pleasure arises from witnessing familiar figures resurging in new roles within the ruling class. One might hope that their previous missteps have instilled a sense of humility or at least some degree of restraint. Unfortunately, history suggests that this is rarely the case.
Positives for Society
Just recently, Neel Kashkari, President of the Minneapolis Federal Reserve Bank, remarked that current U.S. interest rates are “about right.” In his view, there are significant societal benefits stemming from the Federal Reserve’s lenient monetary policies.
“The data suggests that we should maintain an accommodative approach. There’s also a societal imperative to do so; if we can help individuals avoid permanent loss, it’s undoubtedly a positive for society,” Kashkari stated.
The last time we heard from Kashkari was in late 2009, during a period when he himself felt at risk of being “lost permanently.” After serving as the federal bailout chief, responsible for deploying Henry Paulson’s $700 billion TARP fund, he experienced a professional meltdown. He even retreated to a cabin in the Sierra Nevada, where he famously uncovered life’s meaning while chopping wood.
After taking that reflective step back from public service, what could have motivated Kashkari to re-enter the fray with the Fed? Though his intentions remain uncertain, it appears he believes that advocating for low-interest rates can genuinely assist the populace.
Regrettably, this reveals that Kashkari may not have learned from his experiences in Washington, where taxpayer funds were funneled to major banks. If he had, he would grasp that the moral hazards tied to bailing out banks lead to unwarranted risks, ultimately jeopardizing savers and retirees. He would also recognize that extended credit primarily serves investment bankers and large corporations, who stand to gain the most from borrowing at artificially low rates.
Even Death Won’t Save Us
However, it’s Kashkari’s assertion that interest rates are “about right” that is particularly striking. Does he truly believe he has access to all the necessary information to accurately assess the market? If one person’s waste is another’s treasure, what entitles him to determine the correct value of any asset?
Clearly, Kashkari lacks this knowledge, just as Fed Chair Yellen and the entire FOMC dot plotters do. Naturally, the valuation of money is best left to consenting parties evaluating transactions on an individual basis.
This is precisely the fundamental flaw of today’s centrally planned monetary policies. The ramifications are staggering. They have driven public and private debt to unsustainable levels, contorted currencies beyond reason, and created bubbles and crashes across real estate, stock markets, emerging markets, mining, oil, gas, and beyond.
Despite this, state officials persist. They may occasionally retreat into solitude but invariably return with more “beneficial” proposals for society. The most successful among them ascend to the Senate, where they can continue funneling funds into intricate schemes under the guise of public service.
Ultimately, the only barrier they face is death itself. Yet, even then, there is always a contingent of eager individuals ready to step in and champion the cause.
In conclusion, as we navigate through economic turmoil prompted by centralized planning, it’s crucial to maintain a critical stance. While there may be fleeting benefits to be found, the overarching issues and potential consequences often outweigh any temporary advantages.
Sincerely,
MN Gordon
for Economic Prism
