Guest post from John Rubino, you can find him at his Substack:
Watching almost any U.S. policymaker try to explain what they’re doing these days is a surreal experience. Whether it’s foreign policy — especially our multi-front plan to start World War 3 — or public health or border security, it’s clear that these guys have absolutely no idea how their tools work or what the result of their actions will be.
Nowhere is this more obvious than with money and finance. The Fed keeps making mistakes and then scrambling to fix the resulting crisis, in the process making even bigger mistakes, leading to even bigger crises. Hence the increasing amplitude of booms and busts since the 1990s.
And now, as soaring interest rates destabilize regional banks, we have the spectacle of Treasury Secretary Janet Yellen, a labor economist who spent a lackluster term as Fed chair, trying to explain her government’s response to an apparently random series of bank failures. Which she can’t do because she clearly has no idea what her policy is or what its impact will be.
This kind of generalized cluelessness is what you get when things have been too good for too long. As the old saying goes, “Hard times create strong men, strong men create good times, good times create weak men, and weak men create hard times.”
We are clearly in the last stage of that process.
Guest post from John Rubino, you can find him at his Substack.