As Jeffrey Lacker leads the pack on the Fed’s “concern of overheating” front, last Friday’s 2016 fourth quarter GDP numbers completely contradict the narrative. Coming in at a paltry 1.85% growth rate, the Fed was handed yet another excuse to push off the so-called “normalization of interest rates” further into the future. The Fed’s FOMC again confirmed as much at its February meeting.
2017 is off with a drab whisper as the FOMC, as expected, kept the Fed Funds rate target unchanged at .5-.75%. Further, there was no mention of the alleged three 2017 hikes, which “experts” might consider as to be a dovish move.
Many of us were once convinced that idea of the centrally-planned economy, both in theory and in practice, had been completely buried. Most economists today would argue that the planned economy doesn’t work, and in the last two decades of the twentieth century, almost all the planned economies shifted toward market economics.
It is easy to fall into the trap of the “cost-plus” method. That is, to consider prices for consumer goods to be a function of the costs of production. Unfortunately, the cost-plus method of pricing is commonly taught to MBA students worldwide, thereby cementing a bureaucratic view of business and the economy.
As someone with a relatively distant relationship with horses, I have occasionally seen some with blinders on and wondered exactly why, when I have never noticed any other animal with blinders on. So when my curiosity got the best of me, I did some checking.
2017 is off with a drab whisper as the FOMC, as expected, kept the Fed Funds rate target unchanged at .5-.75%. Further, there was no mention of the alleged three 2017 hikes, which “experts” might consider as to be dovish move.
Travels in America
The trip across the Atlantic took thirty-five days, They sighted land at Newfoundland, then proceeded down the coast. At Newport, they boarded a steamboat for New York, where they arrived on May 10th, Tocqueville found these new contraptions imposing, as he found New York itself. He wrote to a friend in France:
Alexis de Tocqueville
Introduction
In the year 1835, most of Europe was still in the grip of the conservative reaction that followed the French Revolution and fall of Napoleon. While liberal ideas were a force in public life in England and France, even there political power was in the hands of a small minority. Elsewhere, the spirit that prevailed was that of Prince Metternich, the minister of the Austrian Empire and sworn enemy of liberalism, nationalism, and democracy. When uprisings against this rigid order did occur, as in some of the Italian states or in Spain, they were quickly and easily crushed.
Tocqueville’s Background
Alexis de Tocqueville was born in Paris, in 1805. He was descended from Norman nobility, one of the oldest aristocratic families in France. One of his ancestors fought with William the Conqueror, at the Battle of Hastings in the year 1066, and the family’s history for centuries was closely intertwined with the history not only of Normandy, where where their lands and their ancestral castle were located, but of France as well.
