Into the Gloaming redux

In a tribute only E. Grayden Carter and Spy Magazine's "Logrolling in Our Time" (#GIK) could love, Hilsenrath [John is it?] gushes over Greg Ip's Economist post on slow growth and the Fed.


The article is just a plug for Larry Summers and the growing meme that we are fated to slower growth rates in the US. Slow to "get it" but not incorrect Hilsenrath wonders if "The Fed was too loose in 2000 fueling a housing bubble and too tight in 2006 helping to end the expansion." Don't go too far out on a limb there John.

Left out of the discussion, but certainly known to Mr. Summers, is the tax and sequester adjustment that took place in 2013. The plutocrat cognoscenti would prefer you accept stall speed growth and blame the Fed rather than admit their own mistakes. Again, we do not subscribe to the view the Fed "misdiagnosed" anything. The loose and restrictive policies and consequences are typical of all Fed history. Structurally Trapped post-crisis economies need sharply lower IS/LM curves AND aggressive fiscal programs. The key is to target them to new infrastructure and industry and not the archaic and inefficient  areas associated with the collapse (read banking, housing and autos).

My advice is to take a step back and recognize that the "Into the Gloaming" crowd were also vocally hyping the bond market around Memorial Day. The demographics of the Boomer generation will be a huge input over the next 20 years. The right leadership and the right policies can keep us out of the gloaming.

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