Here in Argentina, this year's inflation rate is 53%--so far. Lessons on how to screw up an econ
Traveling around the country for the last month, I see what utter havoc politician's short-sighted economic decisions can bring to normal people's lives. The country's inflation is the consequence of short-sided people thinking about the next election, not the next generation.
Unfortunately, Trumpnomics has ushered the same approach to America. A quiet pillar of America's astonishing economic prowess over the last century has been an independent Central Bank.
Remember the audacity of FED Chair Paul Volker who raised interest rates to 21.5%? That certainly lost Jimmy Carter the 1980 election. But it was necessary. No politician will ever make that kind of hard decision. That's why we need a FED that is not a political lap-dog.
While the White House and the Congress have created a national catastrophe with fiscal policy--the levers of monetary issues, like interest rates, have been kept out of politician's greedy, short-sided political hands.
One of the quiet horrors of this Administration is its badgering and bullying the FED. Sadly the FED Chair is no Volker. He is a wimp succumbing to the White House pressure. America's interest rates ought not to be determined by a guy with a New York developer's sensibility making policy by tweet.
The Trump economic plan is a sugar high. Designed to make a few people much richer and keep the economy on a roll--until December 2020. Keep the party rolling, an unpaid-for trillion-dollar tax cut for the rich, combined with artificially low-interest rates and a 2019 trillion dollar deficit.
Now, add to this toxic economic mess, the surrender an independent FED. This will not end well.