Back in the early 90’s during that era’s presidential campaign James Carville coined the narrative “It’s the economy stupid!” as to have his operatives rally around and focus their attention in a singular direction. Not only was it a brilliant strategic meme, it continually gave clarity to near everyone as to exactly what was “the” problem affecting everything.
Regardless of one’s party affiliation, discounting the simplicity and power contained within that simple line is to do so at one’s peril. For we remember it today decades (yes decades!) later because of its simplistic brilliance and effectiveness. During that period – if you weren’t talking and answering questions that were economy specific – nobody listened, nor cared. It was all about jobs, wages, GDP growth, etc., etc.
Today many are talking about the economy, but that’s all they’re doing: talking. Doesn’t matter if its today’s politician, CEO’s from the largest corporations, some national or regional business association figure-head, right down to academia with its self-perpetuating gaggle of Ivory Tower economic aficionados. All they are doing is paying lip-service to the problems. And the reason? They can’t do anything about it because as of today, the U.S. economy is being controlled high-handedly by The Federal Reserve. The U.S. economy has never before been under the command and control of a single entity – until now.
Some will scoff at the notion at first, however, all the proof that is needed is to look honestly at what out capital markets have morphed into over the last 7 years. The once great symbolic face and engine of capitalism, as well as its economic might and capital creation has been reduced to nothing more than an interface for a handful of wiz-kids with no business or economic prowess; just a Ph.D or specialized knowledge in mathematics or algorithms as to program High Frequency trading programs to skim or front-run provide liquidity for the “free money” pumped into the capital markets via the myriad of QE programs facilitated, and only made possible by the Federal Reserve. That’s not capitalism – that’s interventionism which fuels crony capitalism – pure and simple.
What remains currently since the true business and economic principles of supply and demand were pushed aside, then out entirely as we have understood them for over 200 years is what you have today is : A casino housing well-connected players. Nothing more – nothing less.
Remember not all that long ago where if it were learned, or was rumored, one approached the Fed’s “window” the implications as well as concerns it raised? Now? That window is seen in no different a light than the one located at any casino worldwide. Where one picks up their “chips” to play their index game of choice. Again, think about that for a moment and try to differentiate the difference between the two. Unimaginable just a few years ago. Today? It’s not only imaginable – its reality!
This issue has created a scenario that’s befuddled the so-called “smart crowd” yet is glaringly obvious to anyone with a moniker of business acumen.
No comments:
Post a Comment