This entire article is based on false premises, and presents a very misleading picture of what the Fed is actually doing. Complaining that the Fed is doing QE is just right-wing derp masquerading as a left-wing critique. thenation.com/article/econom…
There are so many basic factual errors that it should almost be retracted.
It originally said the Fed’s entire $7 trillion balance sheet was how much it had spent bailing out big banks since March...
Then it was changed to imply that the Fed had spent $7T since March on Treasuries & mortgage-backed securities, then it was changed again to just say trillions, because that is what actually happened.
The $7T was the Fed's cumulative balance sheet, not what happened since March.
It also implicitly criticizes the Fed for cutting rates to zero and doing QE (both of which are about lowering rates) by criticizing how cheaply companies can borrow in private markets, and *vastly* overestimates both how cheaply and how much the Fed is directly lending itself.
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It’s incredible how bad the Tories are at making economic policy. They did austerity in 2010 when markets were begging them to borrow more, and budget-busting tax cuts for the rich today when markets wanted them to cut the deficit.
Also incredible Labour keeps losing to them.
I might've been giving the Tories too much credit when I said they were incredibly bad at econ policy 5 days ago.
Blithely pushing through tax cuts for the rich that, due to pension fund weakness, create a vicious circle in your bond markets is one of the dumbest things ever.
Here's the backstory on how the initial sell-off in longer-dated British bonds was leading to an even bigger sell-off due to margin calls on pension funds.
The BOE was very right to step in and stop this. It's what central banks are for. ft.com/content/038b30…
The problem with creating an off-ramp for Putin—which we should try to do—is it isn’t clear anything would be acceptable to him.
He started this war with maximalist aims. He wants, at the very least, to install a puppet regime that isn’t close to NATO *or* the EU.
Remember, what set off Ukraine’s 2014 revolution wasn’t anything to do with NATO, but rather their pro-Russian president backing out of a trade deal with the EU because Putin wanted him to.
It seems highly unlikely that Putin would end his invasion even if Ukraine promised to stay neutral or allowed him to formally annex the DNR & LNR *because he doesn't want it to be independent & to get closer to the EU*.
We should still try to negotiate, but need to be realistic
If it's a day that ends in "y," Greg Mankiw is arguing that the higher taxes we'd need to pay for a bigger welfare state aren't worth it because it'd hurt growth too much. nytimes.com/2021/09/15/opi…
Mankiw likes to talk about this in terms of the theoretical tradeoff between efficiency & equality. But what he doesn't mention is that research from those wild-eyed liberals at the IMF has found there might not be much of a tradeoff at all.
Countries with lower inequality, the IMF found, tend to have more sustained growth, and redistribution doesn't seem to hurt growth very much at all. You'd have to get to something close to full communism for it to do so.
This is an important point: a lot of very smart people, from VCs to bank execs, have invested a lot of time and money into trying to find a use for bitcoin. They haven’t found one yet…
…Well, other than as a pyramid scheme, which it excels at.
This creates a perverse feedback loop: bitcoin investors make so much money off its socially useless pyramid scheme qualities that they think even more that it *must* be important, because it’s making them money.
But no. It’s just a pyramid scheme. An energy intensive one too.
This doesn’t mean that bitcoin will or has to go to zero, though, because of what I call self-fulfilling stupidity: the inability of libertarian tech bros to understand empirical reality means they can keep deluding themselves forever
Imagine thinking that a joke pyramid scheme is better than the most widely used currency in the world, a currency which hasn’t even experienced more than 2% inflation in decades either
Currencies don’t exist just to be scarce. Currencies don’t exist to be good investments either. Currencies exist to facilitate the everyday trade—i.e., buying things at stores—that we call having an economy.
“This actually useful currency isn’t as good an investment as this useless pyramid scheme” is not exactly the withering critique of fiat money that crypto-enthusiasts think it is.
This has always been bitcoin’s fundamental flaw: it’s a good investment because it’s a bad currency, but if it’s a bad currency, why would it be a good investment?
I have a more philosophical objection to bitcoin, though. Most technology creates value by making things more abundant.
Take TV or movies. Those have made performances by the top actors available to everyone, not just those who could afford to see them in person.
This abundance makes everyone better off: the actors who now have a larger market for their talents & audiences who now have access to top performances for v little.
Everyone, that is, except people whose status was tied to being able to see performances that others couldn't.