Taxes, Tariffs, & Tweaks Won’t Solve The Problem!
Guest Post by Dennis Miller at Miller On The Money
Will reducing taxes, raising tariffs and Federal Reserve tweaking interest rates bring lasting prosperity? Unfortunately, the implied good intentions behind Make America Great Again economic plans conflict with the not-so-good intentions of those who could make it happen. Let me explain!
ZeroHedge reports Treasury Secretary Scott Bessent was very critical of the Federal Reserve:
“Bessent said there is a need for ‘deeper reforms’ in bank regulation, noting that the system has been marked by ‘regulation by reflex,’ where bank regulators tend to introduce new rules after issues have already occurred.
‘Rather than preempting crises, regulators all too often react to them after the fact. They play the role of a hazmat cleanup team instead of preventing dangerous spillovers in the first place.’”
The Heritage Foundation suggests, Time To End the Fed and Its Mismanagement of Our Economy:
“Every major economic downturn of the last 110 years bears the mark of the Federal Reserve. In fact, as long as the Fed has been around, it has swung the economy between inflation and recession….
Politicians created a fully government-run institution to bail out government and bad banks alike: the Federal Reserve.
Since its founding, the Fed has stolen 98% of the value of a dollar. It has used those profits to repetitively launch boom-bust cycles.”
ZeroHedge; quoting Mr. Bessent:
“‘Has the organization succeeded in its mission? If this was the FAA and we were having this many mistakes, we would go back and look at why has this happened.‘
On some views the tale of the tape is not flattering for the Fed.
- On financial stability they arguably played a major role in seeding the 2008 financial crisis via too-low interest rates after 9/11 and were then slow in responding once the crisis emerged (remember Bernanke saying sub-prime is “contained”?).
- On banking regulation, they seem to have missed the vulnerabilities inherent in the balance sheets of Silicon Valley Bank and others (to say nothing of Bear Stearns, Lehman etc.) which they then blew up through their conduct of monetary policy.
- On the question of monetary policy itself, many will remember the erroneous assurances that the inflation is transitory – a mistake repeated all around the world.
Bessent went on to muse over “all these PHDs over there, I don’t know what they do. This is like universal basic income for academic economists.”
Color Me Skeptical!
Wikipedia offers his bio:
“Bessent graduated from Yale College in 1984. In 1991, he was hired by Soros Fund Management, eventually becoming the head of its London office.
In this role,…he was a leading member of the group that profited by $1 billion on Black Wednesday, (shorting) the British Pound sterling crisis. He made another $1.2 billion profit for SFM in 2013 betting against the Japanese yen.”
Do I understand this correctly?
| An Ivy League graduate, with a degree in political science, who made billions working for Soros by shorting currencies of over-extended governments, is going to lead us to the promised land by driving reform at the Fed??? |
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Author: Dennis Miller
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