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Skanda Amarnath ( Neoliberal Sellout ) Profile picture
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2 Dec, 11 tweets, 5 min read
Mnuchin & Toomey are trying to perpetuate an absurd interpretation of the CARES Act solely on the basis of "trust me, I helped negotiate this bill", never mind the pesky statutory text. There are two sides to every negotiation...
Good to see Senate & House members push back
Both Mnuchin & Toomey knew that the Treasury Secretary continues to retain authority to modify, restructure or otherwise amend its equity investments in Fed lending facilities/programs even after Jan 1, 2021. That's why bills were put forth after CARES to curb that authority....
@SenatorMenendez was the first to call out this ridiculous attempt to rewrite the law. Section 4027(c)(2) clearly says "ON January 1, 2026" not "By January 1, 2026" or "No later than January 1, 2026"
c-span.org/video/?c492674…
Thanks to @SenCortezMasto for scrutinizing Secretary Mnuchin's very dubious claims about where his legal discretion ends. Also got Mnuchin to admit that he is doing this solely b/c of his flimsy legal interpretation, and not b/c he thinks it's good policy: c-span.org/video/?c492672…
@SenatorSinema clarifying that there is no choice to be made here between grants and making credit available to small and mid-size businesses. The answer is both. Mnuchin is propagating a false choice and incorrectly cloaking his decision in proceduralism: c-span.org/video/?c492708…
Today we got an even steadier drumbeat of pressure on Couldn't be clearer than what @RepMaxineWaters put forth in her opening statement. Republican legislative attempts to end the Fed facilities reveal their own knowledge of what Section 4027 says: c-span.org/video/?c492697…
Thank you to @RepCindyAxne for her concise and effective inquiry. Mnuchin has done a 180 from his letter on the policy justification for ending the facilities. Now he is trying to hide solely behind the law...but it doesn't square w/ 4027 & 4029. c-span.org/video/?c492687…
If you're looking for a more humorous exchange, check out this clip from @RepKatiePorter, in which she quite rightly asks Secretary Mnuchin "Is it currently the year 2026?" Which is worth asking because he seems deeply confused about what 4027 & 4029 say:
c-span.org/video/?c492696…
Fantastic to see @RepPressley call out Mnuchin's claim for what it is-- "a jedi mind trick."

Mnuchin wants to perpetuate a legal view that goes against the statutory text in order to somehow legally bind the next administration: c-span.org/video/?c492698…
@RepAOC exposed Mnuchin's blatant misreading of CARES:
Unlike the airline loans, Treasury did not "make Main Street loans." It made an equity investment in the Fed's Main Street Lending Program. Next Secretary can modify/restructure/amend the investment: c-span.org/video/?c492695…
(Shout out to my colleague @ArnabDatta321 for all of his excellent work on this...I'm free-riding on his greatness)

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More from @IrvingSwisher

Skanda Amarnath ( Neoliberal Sellout ) Profile picture
24 Nov
*MNUCHIN TO PLACE $455 BLN UNSPENT CARES MONEY IN GENERAL FUND ... *TREASURY NEEDS CONGRESSIONAL APPROVAL TO USE GENERAL-FUND MONEY

Transferring to the general fund before Jan 1, 2026 would be in violation of the CARES Act
4027(a) is very clear that Congress' $500B appropriation to the ESF was to "carry out this subtitle."

4027(c)(2) is the only place in the subtitle that permits a transfer to the general fund, and it specifies that this is only "On January 1, 2026" (not "by" or "no later than")
Section 4027 of the CARES Act is quite clear about the timeline and set of purposes for which the ESF appropriation may be used:
Read 4 tweets
Skanda Amarnath ( Neoliberal Sellout ) Profile picture
27 Aug
Now for what I see as the most disappointing aspect to the Fed's framework review...the doubling down on inflation targeting.

I think the Fed rightly sees its primary error as one of insufficient accommodation, but the reasoning and remedy are both flawed
medium.com/@skanda_97974/…
The thrust of this framework review has primarily centered around inflation. The Fed believes that inflation outcomes will self-perpetuate through the ever-unfalsifiable belief in the role of inflation expectations. By committing to more inflation, expectations will shift too...
I fear that as the Fed tries to educate the public about what it means for inflation to "average 2%," there is only going to be more attention paid to a fickle noisy messy macro variable that does not serve as a reliable guide to real-time macroeconomic analysis.
Read 20 tweets
Skanda Amarnath ( Neoliberal Sellout ) Profile picture
29 Jul
We didn't learn a whole lot about the Fed's forward guidance strategy aside from the fact that it will be related to the conclusion of the Fed's framework review. If the Fed needs some suggestions for how to proceed with state-contingent forward guidance
medium.com/@skanda_97974/…
For those wondering, yes, these suggestions overlap with @employamerica's proposed #FloorGLI framework in that the goal is to achieve a baseline rate of employment and wage growth: medium.com/@skanda_97974/…
The Evans Rule had a number of flaws from which Sudiksha Joshi and I hope the Fed learns the right lessons...

To start with, the Fed really should look beyond consumer price inflation if they want to escape the asymmetric costs posed by the zero lower bound...
Read 35 tweets
Skanda Amarnath ( Neoliberal Sellout ) Profile picture
29 Jul
If you've finished your lunch and have an hour to spare before today's FOMC meeting, some suggestions for how the Fed should approach its forward guidance strategy:

medium.com/@skanda_97974/…
I think the starting point for how the Fed should proceed with forward guidance starts with the Evans Rule. My co-author Sudiksha Joshi and I tried to first put some context around what the Evans Rule actually meant for the economy from 2012-14: medium.com/@skanda_97974/…
The Fed is obviously not an all-powerful institution. Fiscal policy is the more direct mechanism for providing affirmative support; the Fed is more constrained. But it doesn't mean the Fed is powerless either. Forward guidance is how the Fed can commit to "doing no harm"
Read 26 tweets
Skanda Amarnath ( Neoliberal Sellout ) Profile picture
17 Jun
Finished "Trade Wars Are Class Wars" last night. Most of my praise will prove redundant. If you're new to the discipline, this is much better than anything taught in intro, intermediate, or advanced macro.
I hope this can be a generational inflection point in macro thought
Strongest aspects:
1. The history alone is great. They draw from a number of underrated examples/precedents. The authors also show a deep care for placing events in their proper context. If only economic analysis was always rooted in such historical and contextual literacy...
2. The emphasis on accounting and balance of payments data. Prominent academics love to say "that's just accounting," mostly to avoid questioning investment-saving relationships. Damning that prominent credentialed economists are so BoP-illiterate (some get explicit mention)
Read 5 tweets
Skanda Amarnath ( Neoliberal Sellout ) Profile picture
23 Apr
Does Nikki Haley not know what we're doing for businesses right now? Sounds like she's also against PPP.

If your answer in recessions is "you should have saved more!" you fundamentally misunderstand the nature of recessions. Tbf, this error is also committed by folks on the left
Total income = total expenditure.

If you want to earn more than you spend, you need someone else in the economy to correspondingly spend more than it earns.

Every dollar of surplus must find its source from a dollar of deficit (and vice versa)
The problem for households and businesses is that as private sector actors, they need to have extra cashflow (income after expenditures) if they have any hope of building something. They don't have stable sources of borrowing in order to run indefinite deficits.
Read 11 tweets

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