Biz

This Time Money Printing Is Gonna Be Different!

CENTRAL BANKS TOLD TO “MAKE IT RAIN”  Last November we took editorial notice of a column appearing in The Wall Street Journal  written by one Andrew Huszar – a former official with the Federal Reserve who executed the central bank’s first round of QE (“quantitative easing” or “money printing”). “The central…

CENTRAL BANKS TOLD TO “MAKE IT RAIN” 

Last November we took editorial notice of a column appearing in The Wall Street Journal  written by one Andrew Huszar – a former official with the Federal Reserve who executed the central bank’s first round of QE (“quantitative easing” or “money printing”).

“The central bank continues to spin QE as a tool for helping Main Street,” Huszar wrote. “But I’ve come to recognize the program for what it really is: the greatest backdoor Wall Street bailout of all time.”

Indeed … not to mention the greatest redistribution of wealth from the poor and middle class to the rich ever .

“Spread the wealth around?”  You betcha … although what we’ve witnessed has been precisely the reverse of what Barack Obama suggested to Joe The Plumber during the 2008 campaign.  Go figure.

For those of you keeping score at home, the first round of quantitative easing, known as “QE1,” took place from November 25, 2008 through March 31, 2010.  Over that period, the Federal Reserve added $1.7 trillion to its balance sheet ($300 billion in Treasuries, $1.2 trillion in mortgage backed securities and $175 billion in agency bonds).  The second round, dubbed “QE2,” took place from November 3, 2010 through July 1, 2011.  Over that period, the Fed added $600 billion in Treasuries to its balance sheet.

Another so-called stimulus plan offsetting longer term securities with the sale of short-term debt (a.k.a. “Operation Twist”) began in September 2011 – and was extended in June of 2012.

And of course in September 2012, the Fed began its latest and greatest round of money printing – an open-ended commitment to create $85 billion in new assets each month.  In January 2014, the Fed began to “taper” this commitment – reducing its money-printing by $10 billion a month.

Currently, $35 billion in new assets are being created on a monthly basis.

What has been the result of all these printed trillions (not to mention the trillions spent and lent by government during its ongoing “stimulus)?  Easy: The weakest “recovery” ever.

"MAKE IT RAIN"
“MAKE IT RAIN”

How come? That’s also easy: When you channel your “stimulus” to the one percent (at the expense of regular people), you weaken the consumer economy upon which the global free market depends.

Anyway, years after their hand-wringing and “something must be done” rhetoric, it seems the world’s money printers have finally figured it out.

Earlier this week Foreign Affairs – the official publication of the uber-powerful Council on Foreign Relations – ran an item entitled “Print Less, Transfer More.”  The gist of the piece?  First it acknowledges the obvious: That the massive Keynesian intervention foisted on the America taxpayer has failed.

“Such policies have only fed a damaging cycle of booms and busts, warping incentives and distorting asset prices, and now economic growth is stagnating while inequality gets worse,” the article states.  “To some extent, low inflation reflects intense competition in an increasingly globalized economy. But it also occurs when people and businesses are too hesitant to spend their money, which keeps unemployment high and wage growth low.”

The answer?

“Make it rain,” authors Mark Blyth and Eric Lonergan suggest.

“Governments must do better,” Blyth and Lonergan continue. “Rather than trying to spur private-sector spending through asset purchases or interest-rate changes, central banks, such as the Fed, should hand consumers cash directly. In practice, this policy could take the form of giving central banks the ability to hand their countries’ tax-paying households a certain amount of money. The government could distribute cash equally to all households or, even better, aim for the bottom 80 percent of households in terms of income. Targeting those who earn the least would have two primary benefits. For one thing, lower-income households are more prone to consume, so they would provide a greater boost to spending. For another, the policy would offset rising income inequality.”

Catch that?  Having printed trillions of dollars for the super rich, central banks are now being advised to print money for the rest of us.

Do we support such a policy?  No.

Don’t get us wrong: We believe government welfare (to the extent it should be provided at all) ought to be granted directly to recipients in the form of vouchers – but that’s spending money, not printing it.

Truly empowering consumers means letting them keep more of what they earn – and removing barriers to their employment, innovation and profit-generating potential – not artificially creating additional assets that devalue what they earn.

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36 comments

Centrist View August 28, 2014 at 9:07 am

In the United States of America, where does capitalism actually exist, aside from flea markets and the guy selling watermelons and peaches out of the back of his pickup truck on the road side?

Reply
Sandi Morals August 28, 2014 at 9:43 am

Dems/lib voters selling their EBTcards (food stamps) for .50 on the dollar?

Reply
SCBlues August 28, 2014 at 10:01 am

“Dems/lib voters selling their EBTcards (food stamps) for .50 on the dollar?”
Oh shit!. And I’ve been selling mine for .25 on the dollar and thought I was living high on the hog . . .

Reply
Sandi Morals August 28, 2014 at 10:12 am

Lol….takes guts to admitt to a felony

Reply
SCBlues August 28, 2014 at 10:19 am

LOL – you’re a fucking blathering idiot.

Dab Naggit August 28, 2014 at 10:20 am

Don’t need to when just about every business has figured out how to accept them.

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Deo Vindice SC August 28, 2014 at 1:20 pm

Nikki sells the State of SC for 10 grand and TV spot, your point ?

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Lisa Ka September 7, 2014 at 7:06 pm

The guy selling crack on the corner? The gal running the gun store? The guy selling stolen goods off the back of a truck?

The “underground” economy is still a free market.

And all good good arguments to Abolish the IRS.

Reply
SC Political Digest August 28, 2014 at 9:22 am

The problem w/ FITS and the Liberal-Tarians: They complain about the feces on the carpet, while Obama is viciously @$$-raping them.

Effeminately hand-wring, as Liberal-Tarains do, over the symptoms, while the disease uses to you spread it’s corruption. Vote as FITS says, and the Failure will just multiply in waves….

Reply
Not Of This Earth August 28, 2014 at 9:43 am

You have no life, and it shows. Sad … very sad, indeed.

Reply
Sandi Morals August 28, 2014 at 9:46 am

He tells the truth and you just don’t like it.

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I Challenge You August 28, 2014 at 9:49 am

Prove it. You can’t. You are him and he is you.
You are challenged. I will give you five minutes from the time of this post to prove he is correct. You must supply creditable sources (weblinks).

Reply
SC Political Digest August 28, 2014 at 9:50 am

FITS rolls out you propaganda, you his bevy of F*#king idiots, like you, spend all day attacking the people who refute his stupid bull-S#!8…do you know haw stupid you look?

Hey Dick Bump August 28, 2014 at 9:51 am

Woooooooo …. Why so angry?

SC Political Digest August 28, 2014 at 9:55 am

Not angry…just talking to you like you need to be talked to. Your puppet masters are real sweet, while robbing you blind. I’m honest w// you, and you get wor wittle fee-fees hurt..Grow up and deal w/ it Dum@$$….Either I (and those like me) prevail, or we have no country worth living in…We cannot afford idiots who vote like you…

Hey Dick Bump August 28, 2014 at 9:58 am

You are in denial. You are angry … look at all the cussing in your other post. Obviously a bipolar psychotic.
You know, God created houseflies, cockroaches, maggots, mosquitos, fleas, ticks, slugs, leeches, and intestinal parasites, then he lowered his standards and made you. I take it back; God didn’t make you. You are Satan’s spawn. You are Evil beyond comprehension.

SC Political Digest August 28, 2014 at 10:14 am

Who the F*#k cares you Boring Idiot?

If you can’t do anything but insult me, it shows how F#*king empty of ideas you are. This is a democrat politics website. Why is it you Dumb F*#ks defend your lack of intelligence by bashing me. Are you that F*#king stupid?

Tango Trailer Court August 28, 2014 at 1:46 pm

Tell us BigT, Lawrence- Emily, etc., What was it like the first time your granddaddy walked into your bedroom dressed in drag, that camel hangin out of the corner of his mouth, eyeing you? Did the prison tattoos and the stench frighten you into paralysis or did you scream for Mamma T.? Did she hear your screams or was she out on the porch dancing the Tango with the maintenance man?

Sandi Morals August 28, 2014 at 9:50 am

I can give you my panties, instead.

SCBlues August 28, 2014 at 10:31 am

“I can give you my panties, instead.”
Oops! Hand sanitizer please!!

Deo Vindice SC August 28, 2014 at 1:26 pm

Size, style, and are they soiled, please ? Not interested if elephant dung present !

Deo Vindice SC August 28, 2014 at 1:22 pm

Like WMD’s

Reply
Smirks August 28, 2014 at 9:51 am

We need a GrandTango Comment Bingo card. Referencing gay sex acts may as well be free space.

Reply
SCBlues August 28, 2014 at 9:56 am

” Referencing gay sex acts may as well be free space.”
Bingo!!

Reply
easterndumbfuckistan August 28, 2014 at 12:13 pm

For your viewing pleasure I present GrandTango Bingo version 1.0

http://s29.postimg.org/j11n6ip6v/Tango_Bingo.png

Reply
SCBlues August 28, 2014 at 6:47 pm

You’re funny!

easterndumbfuckistan August 28, 2014 at 12:14 pm

For your viewing pleasure I present GrandTango Bingo version 1.0 Beta

http://s29.postimg.org/j11n6ip6v/Tango_Bingo.png

Reply
tomstickler August 28, 2014 at 9:26 am

“Keynesian”: You keep using that word. I do not think it means what you think it means.

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Holy City Economist August 28, 2014 at 9:52 am

He’s using it correctly. A tenet of “Keynesian” is for the government to flood the market with fiat money during an economic slump, with the intent of stimulating spending and, consequently, growth. And that’s the intellectual justification for Bernanke’s ill-conceived QE policy.

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SCBlues August 28, 2014 at 9:42 am

” . . . the reverse of what Barack Obama suggested to Joe The Plumber during the 2008 campaign. ”
Joe the Plumber – LOL. You mean “Joe the Not Licensed Plumber” – is that fool/tool still relevant?
And about those black folks in the photo with the caption “Make it Rain” – you mean you funky white boys don’t go to strip clubs too?

Reply
FITS Is Spot On August 28, 2014 at 10:01 am

Try to edit your responses of unnecessary material before attempting to impress us with your insight. The evidence that you are a nincompoop will still be available to readers, but they will be able to access it ever so much more rapidly.

Reply
SCBlues August 28, 2014 at 10:02 am

Try to get an effin clue before you come on here and post your nonsense blah blah blah

Reply
SCBlues August 28, 2014 at 10:07 am

I love it when Sandi comes on under one of his/her various posting names – you can always tell because he/she immediately votes himself/herself up. LOL

Reply
RogueElephant August 28, 2014 at 11:18 am

If back in 08 the Fed had given every tax payer a check for $10,000.00. 1- it would have cost less than half what they borrowed from China, and 2- It would have stimulated the economy from the bottom up. As it was the economy was stimulated from the top down, except the top kept it. (not lending ) but speculated in derivatives and other pie in the sky schemes that lined the pockets of a few at the expense of Main Street. I blame President Bush more for this than I do for the Iraq war. He had bad advisors as well as a Dim congress after 07.

Reply
Barry August 29, 2014 at 3:32 am

You’ve already touched on it, but simply bailing out the hoi polloi wouldn’t have conferred more money and power to our appointed and entitled “betters”.

Reply
Mr Smart August 28, 2014 at 3:24 pm

Amazing that the simpleton who wrote this trash article thinks he’s so much smarter than brilliant men like Ben Bernake. Must be a deluded white male. What Obama did was clear, but you won’t hear the right-tards say it: He *saved* the g-damn economy. Give credit where credit is due you racist bastards. Yeah, a BLACK man saved us. GET OVER IT. Obama saved the economy, he rescued the auto industry and he’s maintained order overseas. He killed Osama Bin Laden who Bush could never find and he won in two landslide elections, despite massive racism still evident and present in our country.

Reply

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