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Gone are the days of the Federal Reserve hiding in the shadows. Now it’s a woke central bank fighting for climate and racial justice. Progressives must not fall for this but instead team up with the populist right to audit the Fed and demand transparency.
Central banks continue to be obsessed with inflation. Current monetary policy is like the behavior of a reckless driver running at two hundred miles per hour, looking at the rearview mirror and thinking, “We have not crashed yet, let’s accelerate.”
Central banks believe that there is no risk in current monetary policy based on two wrong ideas: 1) that there is no inflation, according to them, and 2) that benefits outstrip risks.
In the Financial Times from November 2, 2020, the International Monetary Fund chief economist Gita Gopinath suggested that world economies at present are likely to be in a global liquidity trap. Gopinath has reached this conclusion because the yearly growth rate of the price indexes has been trending down despite very low interest rates policies. According to the IMF chief economist, central banks have lowered interest rates to below 1 percent and in some countries interest rates are at present negative.
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After becoming the apparent president-elect, Joe Biden clearly promised to unify Americans. However, that promise was in sharp contrast to what his campaign promises would actually achieve.
Recently, I told my wife that the 2020 election follies made me think of John Milton. She commented that I may have been the only one in America to make that connection to the second most important author in the English language, after Shakespeare, best known for his poetry. After all, very little of this year’s politics has been poetic (though it could be argued to fit somewhere in Paradise Lost). I was thinking of Milton’s prose.
Whether you have watched The Sopranos, Goodfellas, or The Godfather, the gist of those stories is always the same: a mafia boss gets involved with a private person or sometimes a businessowner and demands a fee to be paid by midnight tomorrow, otherwise said person will lose a finger or two and maybe a kneecap as well. An analogy often made by libertarians is that the government operates similarly to the mafia. The government demands money in form of taxes, which they redistribute as they please.
Anne Applebaum is a renowned historian of the Soviet Union, but her recent book The Twilight of Democracy illustrates a common confusion. She says that she and her husband, the Polish diplomat Radek Sikorski, continue to support “the pro-European, pro-rule-of-law, pro-market center right,” though former friends of hers who held the same views have veered toward nationalist extremism.
