According to much mainstream economic thinking, the definition of money is of a flexible nature. Sometimes it could be M1 and, at other times, it could be M2 or some other M. M1 includes currency and demand deposits. M2 includes all of M1, plus savings deposits, time deposits, and money market funds. According to such thinking, what determines the money supply definition is whether M1, M2, or some other M has a high correlation with key economic data, such as the gross domestic product (GDP).

In the midst of significant weakness in the job market, liquidity issues in money markets, and increased scrutiny of certain capital market bubbles, it has become apparent to all that an affordability crisis exists.

Lately, “affordability” has been the buzzword du jour driving political discourse. Essentials like food, housing, and healthcare cost more than most younger working people can afford to pay, leaving them to struggle without hope of being able to start their own families or purchase single-family homes in decent neighborhoods. In other words, for younger generations the American Dream is dying.

On November 4, New York elected its new mayor, Zohran Mamdani. At age thirty-four, Mamdani identifies as a “democratic socialist.” His victory signals a further leftward shift in New York’s political center of gravity. His proposed governing agenda goes beyond the traditional policies of the Democratic Party and moves toward a more radical and “equitable” program.

Europe became prosperous through a burst of innovation and capital accumulation during the eighteenth-century industrial revolution that allowed individual freedom to replace feudalistic rents and privileges. A new industrial revolution based on digitalization, advanced artificial intelligence (AI) and automation is in the making, but the reputed analyst Wolfgang Münchau claims that Europe is about to miss it.

In recent months, Federal Reserve officials have repeatedly referred to monetary policy as restrictive. In September, Jerome Powell said policy was “clearly restrictive,” and in November, New York Fed President John Williams stated “I still view the current monetary policy level as moderately tight...”