“Since the 1980s, we have given the rich a bigger slice of our pie in the belief that they would create more wealth, making the pie bigger than otherwise possible in the long run. The rich got the bigger slice of the pie all right, but they have actually reduced the pace at which the pie is growing…
Once you realize that trickle-down economics does not work, you will see the excessive tax cuts for the rich as what they are— a simple upward redistribution of income, rather than a way to make all of us richer, as we were told…
We need to design an economic system that, while acknowledging that people are often selfish, exploits other human motives to the full and gets the best out of people. The likelihood is that, if we assume the worst about people, we will get the worst out of them.”
Ha-Joon Chang, University of Cambridge
As you may have gathered, the Fed did nothing in particular today.
They did give a nod to the rest of the world however, with this sentence in their policy statement.
“Recent global economic and financial developments may restrain economic activity somewhat and are likely to put further downward pressure on inflation in the near term.”
When it is not the Winter, it’s China and/or market volatility.
It is always something but certainly no fault on the might FOMC, font of wisdom, paragon of virtue.
There was some intraday commentary on the Fed here and here.
The Fed’s policy errors might be more interesting to watch if one was not within the blast radius of their many abuses of the real economy. Unfortunately with their finger on the trigger of the world’s reserve currency, there are not as many places to hide as there may have been before.
I just love all this talk of the ‘tight labor market’ with Labor Participation at multi-decade lows and record levels of child poverty, among other things. You have to ask, do these people really believe what they are saying? And if so, is that even more frightening than if they were just being politically expedient?
Have a pleasant evening.
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