You’re not good at this.

A recession so contrived and man-made that every economist, politician, business owner, college student, CEO, rapper and professional athlete has been able to see it coming in real-time for months and months…

Take a picture, you may never see anything so obviously about to happen ever again. A child could have foreseen it.

At a certain point, a person who is charge of price stability should probably look in the mirror and say “For whatever reason, I am not good at this. Or whatever method I am using to make decisions is not going well or producing positive outcomes.”

I don’t think this is so much to ask of the people we put in charge of our institutions.

The Federal Reserve’s Open Market Committee for example. If in any given year you find yourself oscillating furiously back and forth between stimulus and austerity, perhaps it’s time to stop and reevaluate. It might be the data you’re using or the way in which you’re using it. It might be your instincts. It might be a combination of things. The pendulum should swing, just not all the way in both directions all the time. That’s not a cycle, that’s a circus.

If your forecasting abilities led you to the conclusion that you would not have to do any rate hikes in 2022, followed a few months later by having to do the sharpest rise in interest rates of all time, maybe you’re not good at this. If you’re buying mortgage and treasury bonds to stimulate the economy in the month of March and then deliberately trying to crash the markets and create a recession in September, you’re probably not the right person to have in charge of the money supply. You may not be the “price stability guy.”

Just sayin.

I’m sure you mean well. I’m sure you’re doing your best. I’m sure there are challenges the rest of us can’t see. I get it. But still. What are you doing. Literally.

It’s not numbers on a spreadsheet. We’re talking about people’s lives being played with. The social costs of being separated from employment are obvious on an aggregate level. On a local and personal level they can be catastrophic. Creating massive bubbles in one calendar year only to have to pop them in the following calendar year is irresponsible. There should be something in between 90mph and slamming on the e-brake. Is this not taught in PhD school? Most of us are taught moderation in elementary school. The marshmallow test. Impulse control. Nap time. Listening.

Zero percent interest rates plus fiscal and monetary stimulus with housing up 40% and stocks at an all-time high was a ridiculous policy. Everyone said so at the time. Here’s me last May, for example: Stimulating the Housing Market is Psychotic. An equally ridiculous policy is record-setting rate hikes piled one atop another before even attempting to see if the first ones are producing the desired effect. Why wait to see if the economy will cool off when we can just crash it and be absolutely certain?  Okay, I suppose that’s one strategy…

I don’t think the whole data-dependent thing is going well. If it’s led us here, I think we can try something else instead without sacrificing anything. Let’s try common sense-dependent, see if that goes a little bit better. Or turn it over to someone else.

Joshua M Brown

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