Jay Powell…We Need to Destroy the Economy in Order to Save the Economy
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Oh, boy, all of the journalists out there, business journalists, waiting with bated breath. What’s Jay Powell going to say? Yeah, Jay Powell was speaking at the Economic Club of New York. Now, there’s a club I would not want to be a member of. Could you be able to fly on the wall there to see all of these corduroy jacket wearing economists?
that have never started a business in their entire life hanging out there. Oh, my Lord, merciful. It would take a bottle of scotch to get me to hang out there. Anyway, anyway, so Jay Powell speaks and he acknowledging the recent signs of cooling inflation. Ah, but that’s not enough. Not enough to buck the trend in order to get down to the 2% inflation rate that is their target. And I quote.
Inflation is still too high and a few months of good data are only the beginning of what it will take to build confidence that inflation is moving down substantially toward our goal. Yes, we cannot yet know how long these lower readings will persist or where inflation will settle over coming quarters. Says they’re united in their commitment to bring inflation down. Okay, this is where he gets to his.
Usual point where that makes no sense to me whatsoever. Should make any sense to you if you actually got a few brain cells. In essence, he says we need to destroy the economy in order to save the economy. Didn’t say that, but it hearkens back to that Colonel from Vietnam. We’re gonna require, our goal is gonna require a period of below trend growth.
and some further softening in the labor market. Hmm. So what you’re saying is, is we need to have businesses go under, we need to have economic growth contract, we need to see people get put out of work, losing their jobs. And that is the, that’s the elixir. That’s.
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That’s your tell us. That is the magic elixir as far as inflation is concerned. You see, folks, that’s utter nonsense. Phillips curve, it’s utter nonsense. It’s just talking about you get the concept of science with equilibrium. Yes, if there is too much of a demand
products and services too great of a demand and there’s not enough supply. Yeah, yeah, prices are gonna go up. There’s no doubt about that. And that also happens when you print way too much money and you just hand it out haphazardly. Now, again, you can address this, I guess, that you think it’s wise to wreck the economy, which seemed to me I would rather
work on the supply side than the demand side. Supply, hey, we can figure out a way. We can make more stuff.
Supply demand, let’s make more, let’s grow that side. Let’s grow that part of the economy to bring prices down. Nah, nah, let’s just, it’s better. We’ll hang out at our economic clubs and we’ll smoke our cigars and drink our scotch and we’ll tinker around with interest rates. All in the hopes that we can find the mighty, mighty Goldilocks that everybody talks about. We gotta have a Goldilocks economy. Yeah, not too hot, not too cold.
Give me a break. I mean, would you describe nature as Goldilocks, you know, from Goldilocks into three bears? No. And again, there’s nothing that you wizards are smart at the Economic Club of New York and the other economic clubs around the country, wherever they may be, can do to figure this out. Nothing. Nothing, you can’t do it.
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It’s just not possible. Watchdog on wallstreet.com.
