The Economist. And is the situation going to be better or worse after 5 years? What are the implications for population growth and therefore real gdp grwoth in the long run?
0 Comments
"This is yet another case where the government is working for a tiny elite against the interests of the bulk of the population. And it is doing it in a way that would be difficult to caricature: making powerful corporate interests direct negotiating partners, while excluding democratically elected representatives from the process.
It is tempting to say that Washington could not get more corrupt, but it probably will." This is what he said last month:
"(M)y outlook implies that monetary policy is currently not accommodative enough," Kocherlakota said, forecasting unemployment, now at 7.7 percent, to fall only slowly to 7 percent by the end of 2014, and for inflation to continue to lag below the Fed's 2-percent target. "Monetary policy should be more accommodative." This is what he said last year: "So, what has been happening with inflation? Inflation was distinctly higher in 2011 than in 2010 and continues to run above the FOMC’s target of 2 percent. Even core measures of inflation, which strip out energy goods and services, and food, went up notably. I see these changes as a signal that our country’s current labor market performance is much closer to “maximum employment,” given the tools available to the FOMC, than the post-World War II U.S. data alone would suggest. As I’ve argued in the past, appropriate monetary policy should be responsive to such signals." "A Practical Utopian’s Guide to the Coming Collapse" by David Graeber.
"Normally, when you challenge the conventional wisdom—that the current economic and political system is the only possible one—the first reaction you are likely to get is a demand for a detailed architectural blueprint of how an alternative system would work, down to the nature of its financial instruments, energy supplies, and policies of sewer maintenance. Next, you are likely to be asked for a detailed program of how this system will be brought into existence. Historically, this is ridiculous. When has social change ever happened according to someone’s blueprint? It’s not as if a small circle of visionaries in Renaissance Florence conceived of something they called “capitalism,” figured out the details of how the stock exchange and factories would someday work, and then put in place a program to bring their visions into reality. In fact, the idea is so absurd we might well ask ourselves how it ever occurred to us to imagine this is how change happens to begin." Via Izzy K at FT. Profits not likely sustainable. Growing Inequality likey to have strong social repercussions.
"If the rest of households stop dis-saving, it will require the rich to really up their spending to keep the system going. There may not actually be enough goods and services for the rich to buy to make this work, but even if it were possible, it would almost certainly increase the resentment of the have-nots until they took it out on them through the ballot box, if nothing else." From the source document: "The image of a dystopian future in which the rich gate themselves off from the rest of society for protection while buying off politicians to ensure their continued privilege 2 doesn’t help us at all in understanding when the current situation will end. And the reality is that we really don’t know when it will. All else equal, falling budget deficits will hurt profitability, but if we do finally get the much-delayed recovery in investment or continued strong buyback activity, it is possible falling deficits could be absorbed without margins falling back toward historical averages. Rising investment would, in all likelihood, sow the seed of falling profits in time through increased competition, aswould buybacks and dividends through rising savings or a societal response. But as for when, it is impossible to know." Via Zerohedge:
"The only way quantitative easing can have a positive impact on economic activity is if the authorities’ purchase of assets from the private sector boosts asset prices, making people feel wealthier and thereby encouraging them to consume more. This is the wealth effect, often referred to by the Fed chairman Bernanke as the portfolio rebalancing effect, but even he has acknowledged that it has a very limited impact... In a sense, quantitative easing is meant to benefit the wealthy. After all, it can contribute to GDP only by making those with assets feel wealthier and encouraging them to consume more. " Here is what I said last week, The conversation continued in the comments section. |
Categories
All
Archives
March 2016
|