Japan, you gave us karate, Godzilla, walkmans (remember those?), sushi, Hello Kitty, and cars which didn’t fall apart. Though we fought you bitterly in World War II America came to love you more than any other country in the world with the exception of the United Kingdom (and maybe Australia, Canada doesn’t count). We hate to see you in your current straits. One, because we have a general affinity for the Land of the Rising Sun. But two, because we are riding the same bullet train here in the States, just a little further down the track.
It has failed. It has failed for over 2 decades now.
But I attach an interesting debate featuring Peter Boockvar (in the Abenomics is a disaster camp) and David Zervos (in the Abenomics is proof that Keynesian huja buja works camp). They are diametrically opposed and it is fun to watch.
End the Fed. But Volker at least had the guts to raise rates to insane levels and effectively crushed 1970s inflation. If we had sound money he would not have had to do that of course. (Nor would he have had the power.)
Of the 4 chiefs still alive Volker is my favorite. Or at least the one I dislike least.
By far the most secret and least accountable operation of the federal government is not, as one might expect, the CIA, DIA, or some other super-secret intelligence agency. The CIA and other intelligence operations are under control of the Congress. They are accountable: a Congressional committee supervises these operations, controls their budgets, and is informed of their covert activities. It is true that the committee hearings and activities are closed to the public; but at least the people’s representatives in Congress insure some accountability for these secret agencies.
It is little known, however, that there is a federal agency that tops the others in secrecy by a country mile. The Federal Reserve System is accountable to no one; it has no budget; it is subject to no audit; and no Congressional committee knows of, or can truly supervise, its operations. The Federal Reserve, virtually in total control of the nation’s vital monetary system, is accountable to nobody – and this strange situation, if acknowledged at all, is invariably trumpeted as a virtue. – Murray Rothbard from (the original) Case Against the Federal Reserve
I actually posted a short clip of Murray Rothbard the other day as part of a post on Ayn Rand and since I’ve been on a bit of a Rothbard kick. He was an amazing political and economic theoretician and if you are not familiar with the man you should be. He is arguably the single most influential libertarian economist ever.
The interviewer rightly points out that Stockman has been calling for a crash for a long time. In March he announced to the world that a crash was imminent and that he was entirely in cash. The market has been up dramatically since that call.
But fundamentally Stockman is right. All the money created by the world’s central banks is floating around out there in financeland (it might not have found its way into YOUR pockets but many Wall Street pockets are full) and that money is tinder just waiting to catch fire.
We keep going down this path and the results just keep disappointing. There’s more smoke. There’re more mirrors. But there’s less and less high quality economic activity.
In the attached article Glenn Reynolds examines the new, increasingly stratified America.