Thread by @gianlucac1

ON POPULISM, ECONOMIC CYCLE AND CENTRAL BANKS: BITTER 3d

People celebrate Central Bankers like heroes that rescued the world.

But then votes in G8 go elsewhere, to leaders which would destroy everethyng.

How comes?

Central bankers since Ali G (Grenspaan) have refused recessions. They did whatever it took to avoid cleansing.

I am not talking emergency actions (2008/2011) which were necessary.

I am talking multi-years unnecessary ultraloose mon pol.

Recessions are a necessary cleansing events. They clean from zombie companies, re-establishing capitalism' necessary social mobility. The State shoud simply make recession manageable (unemployment subsidy) and allow the private sector to re-organize in the least expensive way

Ultra loose mon pol ghas prevented that, by establishing perverse incentives thanks to which zombie companies stayed, hence productivity went down, asset rich became richer, social mobilty was nullified.

As a result the incumbent political leaders did nothing to improve real gdp growth potential, and marignalised even more the loosers from globalization in G8.

Trump, Bojo, Salvini, Le Pen and Afd are symptons of all these. Not causes, just effects.

Under the excuse that "if we do reforms we are not going to be re-elected" the incumbent leaders are doing nothing that entrenching and asking "Moar" of the same mon pol.

Recessions and failures are necessary and if managed correctly they re-establish a form of social justice

G8 politicians on the contrary look like the Statesmen of the Congress of Vienna.

Good luck to all of us.

@micheleboldrin @ThManfredi @DeShindig @dlacalle_IA @CodagnoneLuca @jeuasommenulle @Phastidio