Oh, you want more? Groucho Marx used to tell a joke on
himself that “I wouldn’t want to belong to any club that would admit me as a
member.” That pretty much sums up why we shouldn’t expect much from the new
chairman of the Federal Reserve System. This administration and this Congress
will never admit anyone that is not of the Keynesian-School-of-economics
persuasion. As long as this mentality resides in the political halls of power,
our nation will not get another Paul Volcker.
That means that we should anticipate a continuation of
policies that assume that monetary expansion can spur economic growth. It cannot.
Monetary expansion can spur phony economic growth; i.e., fooling entrepreneurs
to invest capital in projects that will not return a profit. GDP may go up —
temporarily. Employment may go up — temporarily. Janet Yellen and her fellow
Keynesians believe that the Fed, through money creation, can create software
engineers, doctors, nurses, and steel mills. In other words, they think they’re
creating real resources. It’s nonsense, yet they seem to be true believers.
They may couch this error in highfalutin terms, but that is what they mean on a
fundamental level. In the end capital will be destroyed, resulting in an
economic bust, and the nation will have wasted years and resources that it can
never recover......To Read More........
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