The “after action” analysis I’m looking forward to the most — once this coronavirus mess is behind us — is what the actual effect of printing money and deficit spending is. We hear lots of talk about it, but now we’re going to have some data.
8 thoughts on “Fiat money, debt and coronavirus”
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I soooo hope I’m wrong, but I suspect the country will be poorer (bigger deficit) but the citizens won’t be better off (as a whole). The “idea” was good but the execution has left something to be desired. I’ve already heard stories of those spending stimulus money on non-essentials like entertainment. As well, costly investments, such as this, will need to be analyzed closely. https://www.businessinsider.com/fema-paid-bankrupt-company-no-employees-55-million-n95-masks-2020-4
One problem is that whatever happens it’s going to be hard to know what to attribute it to. If catastrophe happens, people can say “it would have been worse without it” (an old game), or “sure, it didn’t work here, but that’s because of the unique nature of the economic difficulties. In a standard situation, when the economy is actually working — in that the number of people who can create value isn’t some tiny fraction of the population — it will work”.
On the other hand, if things work out, since a return to economic health requires lots of actions by individual people, some will say “this would’ve happened regardless and the changes in monetary supply only hindered the recovery.”
This difficulty in figuring out what to make of economic evidence is one of the reasons that Austrians think everyone else is fooling themselves that they’re being empirical. I get their point, but it’s always felt a little off to me, like Lutherans who wait until they’re in a tough spot to pull out the “human reason can’t grasp how these contradictory positions are both true” card.
In order to understand cause and effect we’d have to control variables, and we can’t do that. We can’t, for example, run January to April with one assumption, then go back and run it again with another assumption.
So I agree that none of the analysis will be perfect. But a lot of assumptions will be put to the test.
Speaking of after-action reviews…I’m a bit confused. President Trump said he disagreed strongly with Governor Kemp for opening up certain facilities in Georgia, in violation of Phase I guidelines. Yet, also said he wanted Kemp to do what he thinks is right. Given that context, he tweeted that Michigan should be “liberated” ( Minnesota and Virginia too). That’s interesting given the plan recently announced by the President says states shouldn’t consider reopening until they have 14 days of downward numbers. So, if states are attempting to follow Federal guidelines, why would they need to be liberated?
As well, Trump indicated there was tremendous testing resources available. Yet, the governors indicate they still don’t have the testing resources they need, inclusive of Republican Governor Hogan (chairman of the National Governor’s Association).
Going forward, it seems there is room for improvement in coordination and communications.
He has been flip-flopping like crazy. Most likely he is trying to look good to the public at large and appeal to his unhinged followers at the same time.
You can’t pay too much attention to what Trump says from minute to minute and day to day. Aside from simply being a horrible speaker, he regularly says crazy things, then contradicts them with some opposite crazy thing.
If you want to follow Trump’s politics, you need to watch what he does, and also what he says regularly and repeatedly. As a case in point, I’m sure it’s easy to find ten examples of Trump contradicting Trump on federal vs. state power. But his actions make it clear that he believes in federalism.
From my perspective, this is all absurdly obvious, and anyone who tries to hold Trump to what he says in some press conference is simply looking for gotchas.
Is this good? Is this ideal? Is this what we want in a president?
No. But when it’s been clearly established that the man speaks a certain way, it’s just silly to analyze his speech as if he doesn’t speak that way.
The problem is as POTUS what he “says” and what he does has impact. For better or worse people actually follow what he “says” and sometimes act on it. The critical nature of that role REQUIRES that both be in congruence as much as feasible. So, I don’t buy the…only pay attention to what he does argument…neither should he get a pass for consistently misspeaking.
Speech is action. Let us suppose a woman tells her husband that their son has just been in a serious accident. The husband sits in his armchair with his newspaper and first responds to the wife by saying, “Whatever.” But then he proceeds to go to the hospital to see his son and to do what he can. I betcha the wife is gonna still resent her husband for his initial reaction. His show of indifference through speech was part of his course of action. And if we are dealing with with a person who shows a pattern of verbal flippancy, indifference, perhaps even hostility, that goes on record as belonging to the person’s actions. This goes for the President of the United States thousands upon thousands more than it does for your regular Joe.