How ironic to finally possess evidence of the Reaganite sobriquet “trickle down economics” to excoriate the impact Federal Reserve policies have on weak growth, wealth/job creation. Paul Vocklers recent admonition at the New York Economic Club is food for thought, especially when you consider the professional etiquette established among central bankers.
In a sentence, Vockler slapped Bernanke, even though the fault lies with a recalcitrant Congress and leaderless Executive.
Even though Vockler was referencing “credibility”, he aimed his caustic judgment at Bernanke.
Why?
The unprecedented scale of intervention has failed. Period.
Having Banks swap toxic mortgages for Treasuries worked, but that was so 2008. The intervention actually made the Federal Reserve purchase an equity position at Treasury. This is unconstitutional for it obliterates the real, distinct spheres of operating autonomy that underwrite the success that is our market based order. By activity positioning itself to purchase trillions of dollars of U.S. debt, effectively funding deficit spending, the time has come to take a clear look at failed Keynesianism.
The express goal was to provide relief to Banks in the hope of trickle down credit creation in spheres throughout our economy. Instead, banks were paid interest after toxic swaps, driving equity yields toward another bubble. It helped anyone associated with the policies of the central bank, it did squat for citizens. Like liberal Govmint, it stimulated itself in the guise of benovelence.
Did we mention that real median incomes are down!
Question: what does Govmint do when it’s broke? It bankrupts its citizens!
Welcome to Weimerica!!
This is how crackpot third world political economies behave. It’s now the new normal.
William Holland
William Holland 