Update note:
We have not dealt with inflation for years, because of Barack's no
nothing finance strategy of Quantitative Easing [QE]. We were told over
and over again, during the Obama years, that QE could not and must not continue, yet, Barack ignored those warnings because it took inflation off the table. The problem with that is found in the fact that he also,
at the same time, destroyed billions of dollars of retirement
banking, killed off the 401K money sharing programs, and made it
impossible for banking to make money via their lending programs. In the end, QE only gave us the illusion of a healthy economy.
Barack, in his childish pursuit of "fairness," decided that "profit" was a bad word/concept. Another two terms of Obama or Hillary, would have destroyed America's financial base and, with it, programs such as Social Security and Medicaid. There would have been no money to fund these programs . . . . a future but distinct possibility today.
There is another method for dealing with the threat of inflation and that is by way of controlled interest rates.
QE added "dollars" to our system, reducing the buying power of the dollar (deflation, kind of). Leaving the policy of QE, which weakened the dollar, and, allowing for the growth of interest rates (understanding that rapidly growing interest rates are inflationary) , which strengthens the dollar, is the way a capitalist economy is designed to work. Interest rates are an existential aspect of a healthy economy.
As the economy adjusts to normal capitalist methodologies after ten years of first grader economics, there will be "bumps in the road." Lets just hope that those running our economy via the Fed, are able to deal with the delicacies of a correcting market.
This blog often spoke out against Quantitative Easing. The time has come to pay the piper . . . . . and trust me, "the piper"scenario is much more accurate than you might think: "Barack playing his little flute, as he leads his sheep over the edge - too uninformed to know what the hell he was doing."
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Quantitative easing is an unconventional
monetary policy in which a central bank [i.e. the Fed] purchases government securities
or other securities from the market in order to lower interest rates and
increase the money supply.
Not a terrible analysis. The funny part is that you give all the credit to Obama for QE in the past like it is his decision to make. I know you know this but your readers may not know that the President does not make these decisions. The Federal Reserve committee makes this decision. But you attribute the future decisions to the Federal Reserve because we wouldn't want to give Donald any credit if something goes wrong.
ReplyDeleteYou forgot to add the part about why QE was used and how it worked. QE was used to bring down the the nearly 11% unemployment rate and the rapid destruction of wealth and contraction of the economy. Both of these brought on by the deregulatory policies implemented by former President Bush. By "pumping more money into the economy", there was more free movement of capital so that companies could start borrowing money again and hiring people. The economy likely would never have recovered from the recession without QE.
You have absolutely no proof nor data to prove that Obama was targeting profits and that he didn't think it was fair. Corporate profits were record breaking by the time Obama left office.
Bankers had no trouble making money in the Obama years. I don't even know where you are coming from with your claim that Obama killed 401k programs and retirement banking. No matter if you had your money in stocks or bonds, the Obama years were pretty damn good for you unless you went against all conventional investing wisdom.
You do know that the Prez appoints the Fed Chair, right? That he shares and knows of the Chairs views on such matters as QE before he makes the appointment; that he, the Prez, can fire the Chairman at anytime, if matters do not proceed to his pleasure?
DeleteBernanke, appointed by Bush, was the man who put into practice QE. Yellen was the Chair who brought that insane program to a halt, after the Fed came to own 4.5 trillion dollars in mortgage debt.
Finally, about Barack bringing back jobs via QE, another silly assertion. He brags to this day, about his consecutive jobs increase record but forgets to mention the fact that more Americans were actually out of work than before 1973. More people were on Welfare and on our nation's poverty roles than at anytime in history . . .
To argue that Obama did not influence for QE is like saying he is an honest man . . . . kind of silly, no?
You know that there were significantly more regulations on the banking industry when Bush left office that before he took office; that getting rid of Glass Steagill and its controls on the banking industry was more the issue in 2008 than any other single factor, with the possible exception of the Federal Policy of "Affordable Housing" as the chief cause of the collapse?
Bankers had no troubles? Apparently you missed the fact that more small banks failed during the Obama Error than succeeded, for the first time in American History,