Plebeians generally ignore the tact of their economic central planners. They care more that their meatloaf is hot and their suds are cold, than about any plans being hatched in the capital city. Â Nonetheless, the central planners know an angry mob, with torches and pitchforks, are only a few empty bellies away. Hence, they must always stay on point.
One of the central aims of central planners is to achieve effective public exhortation. While they pursue futility, in practice. They must do so with focus and purpose.
For example, economic reports with impressive tables and charts, including pie graphs, are important to maintaining the requisite public perception. Central planners know that financial scientism must always be employed as early and often as possible.
Statistics, with per annum projections, particularly those that show increasing exports and decreasing imports, are critical to maintaining the proper narrative. The USA’s embarrassing deficit in the balance of international payments will certainly diminish if it’s sketched accordingly in an “official†report…right?
Yet the planners always disregard the simple observation that an economy’s composed of countless, and variable, inputs. How’s a new discovery or technology, and its effect on investment and labor, to be anticipated and forecasted? How are the actions of 7 billion individuals to be modeled and displayed on a tidy diagram?
Amid the Madness
This week Federal Reserve Chairman Jay Powell delivered the latest installment of the Fed’s public exhortation. The occasion was the Federal Open Market Committee (FOMC) meeting statement and press conference. Before we get to Powell’s remarks, however, some context is in order…
Nearly a decade ago, when Lehman Brothers vanished from the face of the earth, and black swans relentlessly descended upon credit markets like common ravens upon fresh Southern California road kill, something utterly ridiculous happened. Money market shares of the Reserve Primary Fund did the impossible. They broke the buck – falling to $0.97 cents a share.
