I think Biden and Trump are somewhat similar in their protectionist ways, it's just that Trump was a loud mouth, buffoon about it. However, this is also where the Biden admin and Dems (in general) have lacked a strong message regarding bringing back supply chains and combatting climate change. It's not going to be smooth.
Maybe a mistake politically but the sooner these folks pay their loans, the better. My young bride made a huge dent in hers during covid thanks to the interest freeze. Looking forward to paying that thing off.
Whether it's an excuse or a genuine belief, Biden has said he doesn't believe he has that authority through executive order. He's already said if Congress passes a bill forgiving $10k, he'll sign it. But apparently even that doesn't have majority support in Congress, so they haven't even held a vote for the GOP to filibuster.
think ur a little mixed up. these Fed actions are monetary policies Fed's purchasing marketable securities from banks (injection of liquidity) Fed's tapering / lessening of these purchases (injection of liquidity) Fed's expected rate hike if i were the Fed Chair and have concluded that inflation is permanent, i'd do exactly what Powell is doing. don't just merely criticize the Fed's decision, what'd you do if you're the Fed Chair?
It's not a Fed issue and there's really nothing that the Fed can do. The inflation is being caused by supply chain issues from labor and materials shortages - not an excess of money in the system. Raising interest rates or lowering liquidity isn't going to fix a shortage of computer chips to make cars with or Los Angeles port backlogs or whatnot.
I agree. Even direct fiscal policies like another round of stimulus checks would not reduce supply issues. I've read op/eds that have argued that drying up stimmy checks would get people back to work, but the genie is out the bottle and Powell has also claimed the wage increases are likely permanent. These all influence positive aggregate demand when the issue has been improving bottlenecks in weakened supply chains or lowering the cost of oil.
I've argued that before too, and I do think a lot of people are living on savings and taking their time getting back to work. But apparently recent data shows that a huge chunk of the lost work force is actually boomers that just made life decisions to do early retirement. A lot of people's savings went up dramatically during the pandemic due to the stock market, so many people may have just realized they are set or learned to live more cheaply during Covid. So it's possible that these labor shortages are a new long-term problem. Going back the 2008 meltdown, I've been a huge supporter of the Fed doing really good things without major long-term consequences (I think inflation fears were overblown, gold bugs were crazy, etc) while the rest of government was flopping around. But this is a mistake on their part I believe - they are trying to fix a problem that's not in their control and I think it's going to have unintended consequences.
u r referring to the supply chain bottlenecks. you understand that the Fed has shifted its position, saying that inflation is no long transitory, no? there is real inflation! that's why the Fed is quicken its tapering efforts towards an expected rate hike in Q2 the supply chain issues are outside the the scope of the Fed's charter
we've been experiencing ~~ a decade long period of near zero-interest environment; not at all for 2008. thus, invalid comparison, once again, you understand that the Fed has shifted its operating position on inflation, saying that it is no longer transitory, no? to that extent, it is within their control to contain permanent inflation,
https://www.aei.org/op-eds/big-state-inflation/ Big-state inflation Throughout 2021, top US economic policymakers held policy positions and deployed political rhetoric reminiscent of some of the darkest episodes of modern economic history. Leviathan is resurfacing, and it is bringing inflation with it. December 4, 2021 By Robert J. Barro One almost had to feel sorry for US Federal Reserve Chair Jerome Powell when, in congressional testimony this September, he expressed frustration at the inflationary pressures affecting the American economy. On the plus side, he finally acknowledged the existence of inflation that would last for more than a few months. But then he went on to argue that the Fed’s expansionary monetary policy was not to blame. That policy includes near-zero short-term nominal interest rates, an enlargement of the Fed’s balance sheet to an astounding $8 trillion, and a continuation of asset purchases at a monthly rate of $120 billion. If there was ever an aggressive monetary policy, this is certainly it. Powell continues to insist that today’s high inflation is all about temporary bottlenecks and supply-chain problems stemming from the pandemic-induced recession and the subsequent uneven recovery. According to this view, the Fed is merely a passive agent, trying its best to provide enough liquidity so that the supply-side inflation does not disrupt financial markets and the overall economy. Powell’s interpretation of current events reminds me of the German central bank’s view in 1923, when it was presiding over that country’s post-World War I hyperinflation. According to the Reichsbank, the inflation derived from goods shortages was attributable to foreigners, whose unreasonable reparations payments had caused a sharp depreciation of the German mark. In this scenario, the Reichsbank was a passive agent, trying as hard as possible to print currency to keep up with the rise in prices. As with Powell, the blame for inflation was put elsewhere – in this case on foreigners – rather than on the central bank’s own policies. Of course, the Reichsbank’s account of the situation was not entirely wrong. Given that the German government and the central bank were relying on seigniorage revenue to pay for reparations, it is true that the reparations payments caused the monetary expansion and the ensuing inflation. But the Reichsbank’s willingness to print money was still a central part of the story. Similarly, Powell is not entirely wrong when he attributes inflation partly to supply disruptions. But the Fed’s willingness to accommodate this process via monetary expansion – rather than fighting inflation by raising interest rates and selling off assets – remains a crucial factor. In any event, if supply disruptions were the main story in 2020-21, they should also have seriously impeded the recovery of real (inflation-adjusted) GDP. Yet by the second and (estimated) third quarters of 2021, the sharp V-shaped recovery since the third quarter of 2020 had already restored US real GDP roughly to its trend-adjusted 2019 level. This V-shaped pattern was predictable, given that the recession in the first half of 2020 was essentially a voluntary choice to shut down much of the economy in response to the spread of COVID-19. Once this shutdown was substantially lifted, it was reasonable to expect that the economy would rapidly return to its previous level. Moreover, it is unclear that this speedy recovery owes much to the expansionary monetary policy or to the accompanying, aggressive fiscal policy. With respect to fiscal policy, the addition of trillions of dollars of federal spending and public debt has been breathtaking. Parts of this policy may have helped the recovery, particularly the subsidies that helped to sustain links between workers and businesses. But the excessive payments to the unemployed likely held back the rebound in employment. From the perspective of long-term economic growth, a well-designed package of infrastructure investment might make sense. However, pandemic-based excuses for spending more federal dollars are increasingly being used not to assist recovery or long-term growth but, rather, to support socialist dreams of a permanently expanded welfare state. This vision reached its apotheosis with President Joe Biden’s Build Back Better agenda, which includes four new entitlement programs. Frankly, I had not realized that the problem in US policy was a shortage of entitlement programs. I still recall President Bill Clinton declaring in 1996 that “the era of big government is over.” Where is Clinton when we need him? I fear that the shift toward a permanently expanded public sector will impede US economic progress in the coming years. In some respects, we seem to be imitating the socialist agenda of Western Europe. But one important difference is that a substantial part of Europe’s tax revenue comes from value-added tax (VAT). Lacking this comparatively efficient consumption tax, the United States will likely rely increasingly on inefficient taxes on capital (levies on corporate profits, capital gains, estates, overall wealth, and so forth). There will also be more emphasis on steeper graduation of tax schedules for personal income, which, as understood by President Ronald Reagan in the 1980s, implies inefficiently high marginal rates at high individual incomes. To return to the outlook for prices, in September 2021, the 12-month-average consumer-price inflation rate was 5.4% (based on the headline CPI). This gauge of inflation, similar to other standard measures, almost certainly will rise as the low figures recorded for October-December 2020 drop out of the average. Indeed, between January 2021 and September 2021, the average annualized CPI inflation rate was 6.9%. In this context, one particularly worrisome sign is Biden’s move to blame greedy oil companies and other large corporations for rising prices. In a speech on September 16, he declared, “We’re … going after the bad actors and pandemic profiteers in our economy. There’s a lot of evidence that gas prices should be going down, but they haven’t. We’ll be taking a close look at that.” President Richard Nixon trafficked in the same sort of rhetoric in the 1970s, just before he imposed price controls that went on to inflict even more economic damage than that caused by open inflation. The disgust with that earlier era of inflation eventually led President Jimmy Carter, in his finest hour, to appoint Paul Volcker as chair of the Fed in 1979. Volcker was not immediately viewed as a hero when he accepted that ending the high inflation of the early 1980s (then under Reagan) would entail a severe recession. But over time, his celebrity status grew as his contribution for taming inflation proved durable. Powell is now in danger of earning the opposite reputation. So far, he has escaped much personal criticism. But if higher inflation becomes generally expected and therefore entrenched, he will increasingly be blamed for it. Before we get to that point, Powell should shift to a Volcker-like contractionary monetary policy that curbs inflation before it is too late. What worries me, to paraphrase Senator Lloyd Bentsen from the 1988 vice presidential debate, is that one could legitimately look at Powell and say: “You’re no Paul Volcker.”
Interesting that while most Americans are unhappy with Biden's handling of the economy and where the economy is heading, President Biden's overall approval numbers are moving up. https://www.cnn.com/2021/12/15/poli...source=twCNNp&utm_content=2021-12-15T17:58:04 Even fox news polling shows him at a 47% approval. Perhaps he is getting a pass, or at least a show of patience, based on his other traits and comparison with the previous president?
once again, OT has been fooled by intellectual dishonest people. earth to OT, the economies of these US and Germany have never been the same. the current US economy has been operating at zero-interest rate environment for ~ a decade, w the overall GDP growing continuously. no other economy has ever had such an injection of liquidity for such a long period of time. not 1923 Germany, not any other economy
first, "intellectually dishonest people." English, mother****er, do you speak it second: https://en.wikipedia.org/wiki/Robert_Barro Unless you're an economics professor from Yale, Oxford, or Cambridge, I don't think you have the standing to level an accusation of someone being intellectual [sic] dishonest people
actually, dood, Harvard comes out on top https://www.topuniversities.com/uni...-subject-rankings/2020/economics-econometrics
glad that my post touched a raw nerve ! again, in the annals of mankind, no other economy has ever received such an injection of liquidity for ~~ a decade, as the current US economy has enjoyed since helicopter Ben was Fed Chair it is too bad that you lack the mental capacity to understand that Robert Barro, even tho he is an econ prof, was being intellectually dishonest.
Yes, and I'm saying they are wrong, to some degree. They've given up on the word "transitory" because of the political blowback and all the criticism they've taken for it. Powell even said directly that it was just a hard word to explain what they meant and that's a big part of the reason they stopped using it. But they were right about the causes and why they thought it was transitory. The current problem is that the supply chain issues are persisting, so it may go on longer and if the whole boomers-retiring-early thing is correct, we might have continuing supply chain problems. But even so, the Fed can't really fix those things with monetary policy tools. All the interest rate hikes in the world aren't going to fix chipmaker problems and things like that. Demand is where it should be, so trying to kill demand doesn't fix anything. The solution is to fix supply chains, and that has to come from the private sector and/or other government solutions.
