Economics comes at you at fast.
We hear a lot about the decay of our institutions and the resulting erosion of faith the American people have in them.
But it's not the institutions that are eroding. The buildings still stand and the principles and regulations under which they operate endure.
No, it's the character and quality of the people who run them that has eroded.
Jerome Powell is a failure. Let's be clear about that. He inherited a bad hand, yes, that included years of money printing and the profligate spending that that printing underwrote.
But he stuck with that hand, making some incremental changes and maybe hoping to draw an inside straight so it wouldn't all blow up on his watch.
Heck, Janet Yellen got away with it, why can't he? Just a little more time...
So, he continued to pour tens of billions of dollars into the economy every month through quantitative easing. He kept the Fed Funds rate, the benchmark against with many interest rates are set and which can have profound influence on the overall market, at zero up until just three months ago.
Quantitative easing, the purchasing of government bonds and mortgage securities using money the Fed simply conjures up out of thin air, ended as recently as that same month.
Yes, Jerome Powell was buying up tens of billions of dollars in treasuries and mortgage-backed securities pumping yet more money into the economy a year-plus into accelerating inflation.
And here we are, just three months after that final bit of economic stimulus, considering for the first time since 1994, a desperate 75-basis-point rate hike designed to do the exact opposite.
The inflation we are experiencing now came as a surprise to him and (most of) the best and brightest minds in our vaunted institutions throughout government, academia, and corporate America.
There's a reason the average person is annoyed.
You know who wasn't surprised though?
Us.
All of us. The writers, the commenters, and the regular social media posters who don't have fancy economic degrees right here at Not The Bee.
This is not to pat ourselves on the back. This is no victory lap.
We didn't get lucky and I don't believe any of us claim to be economic geniuses, but we aren't stupid, either.
And of course, it wasn't only us. Anyone with a rudimentary understanding of the laws of supply and demand and basic arithmetic skills could come to similar conclusions.
But not Jerome Powell.
One year ago, what was he worried about?
Not inflation.
Employment equity.
Not actual equity, mind you, but the copyrighted trademark-pending woke left kind of equity, the kind designed to manufacture Marxist class struggles within a framework of race the better to aggregate yet more power to themselves.
Don't remember reading about that in the Fed's charter!
This was from last August, not even a year ago.
Their forecast back then for inflation?
...with the consumer-price index rising 2.5% in the fourth quarter of 2022, more than the 2.1% they expected in May, and reaching 2.3% in 2023.
Inflation was going to be bad. Real bad. The devil had come to collect his debt. There was always going to be a reckoning. Years of monetary stimulus and deficit spending never comes without a cost.
We knew that. The chairman of the Federal Reserve didn't.
It would be a mistake to blame it all on Jerome Powell. He's just another cog in the wheel of dimwitted experts with the right pieces of paper and accolades assuming that the equally dimwitted people giving them those pieces of paper and accolades were being truthful when they told them how very gifted and smart they were.
There's Treasury Secretary Janet Yellen who still has no idea where all this mysterious inflation came from and esteemed economist Larry Summers who frets that insufficient hysteria over the January 6th Capitol riots during which we came perilously close to losing Nancy Pelosi's desk organizer, could make inflation worse.
No, really.
The full quote, filling in the carefully edited omission:
"If I can step out of my area for one second, I think the banana Republicans who are saying that what happened on Jan. 6 was nothing, or OK, are undermining the basic credibility of our country's institutions — and that in turn feeds through for inflation."
But what about Attorney General Merrick Garland whom we were assured was a legal genius? The man comes across like a middle-school librarian assistant, the one who has to check his notes when alphabetizing book shelves.
Let's not forget our punditocracy. Here's Ron Insana, three weeks ago.
I note none of this with joy but with extreme annoyance.
If inflations ends up averaging around the 8% or so annual rate it was at last month, that means you've just been robbed of a month's pay.
Remember voting for that? No?
Weird.
You do have to wonder if there aren't smarter people behind all this, because inflation does not hurt everyone, not by a long shot. It is a boon to borrowers, depreciating the debt they hold and giving them the opportunity to pay it off with devalued currencies.
For those of you who wonder how on earth the United States can ever pay off its enormous debt, that's how.
Rather than have the courage to tell people they'll have to turn over one month's pay in extra taxes to help pay off the national debt, they'll just take it from them without so much as a hearing.
Oh, and your 401-K? Yeah, sorry about that. It's not going to stretch quite as far into retirement as you could have hoped.
I hear Amazon is hiring, though.
Of course, that only works on the explicit debt, not the trillions of promised entitlement spending looming on the horizon.
The Federal reserve and Wall Street Banks have been doing the little dance they do where they test the waters. A banker says something, the Fed leaks something, markets react, and round and round they go, so we'll have to see.
I guess the Fed decided in this case to go ahead with the rate hike. As such, you might want to start getting used to stories like these.
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