Thursday, July 21, 2016

A Globe-Trotting Billionaire Talks
About Public Anger At Globalization
& Defends Trump's Trade Policy
"Citizens everywhere are unhappy with their governments and angry with their leaders. They are no longer interested in a political rhetoric that they do not understand and that has no value in their lives. Monetary policy, trade policy technological disruption and the array of issues that make up globalization are simply a parade of unintelligible horribles to the average working class citizen. Until recent times, central bank activities were mostly technical, marginal, and unreported. Today central bankers utilize exotic new tools such as Quantitative Easing (“QE”) and massive asset purchases to manipulate markets to conform to macroeconomic mandates and political leaders' preferences. The driving force behind US economic policy is no longer the Secretary of the Treasury or Chairman of the President's Council of Economic Advisors; it is the new breed of central banker on steroids. Foreign exchange, QE, asset purchases and the printing of money unanchored to any external standard, and other technical monetary tools are today’s 'super trade weapons.' ..  In the early stages of the financial crisis, central banks acted quickly, decisively and effectively to provide liquidity and help avert another Great Depression. These actions reinvigorated the payments and settlements system, established a floor on value and forced banks to restructure. Yet instead of curtailing emergency policies as economies recovered, central banks have all but monopolized the economy policies of many nations. As a result, investment has stalled and savings rates are pressing historic lows. Middle- and lower-income workers see no benefits from these policies, while the holders of capital, just as with globalization, enjoy burgeoning investment portfolios and bank accounts. At this point, central bank actions seem mainly to impact asset prices while only marginally influencing the true drivers of the economy, such as real investment, productivity expansion and job growth. We have reached the point where central banks – which are a lot better at emergency responses than steering long-term policy – have become the problem, not the solution."
- Thomas Barrack
LINK HERE to the essay

1 comment:

Anonymous said...

Dean LeBaron