I think I’ll listen now. But if you want some interesting reviews on the book check out the Washington Post and Forbes (John Tammy).
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This is really interesting to me. Roger Lowenstein at the Post is heavily involved with Sequoia Fund. John Tamny is an advisor for a Toreador Research & Trading.
That doesn’t discredit their opinion or make them wrong by any stretch, but it’s interesting the critiques lobbed here are by explicitly money manager types. And that’s kind of the crux of the whole book—Wall St ‘expertise’ vs a more populist common sense.
Is populist one of those words you can just use to mean whatever you want, like the blank tiles in Scrabble?
“Non financial elite” opinion, I guess. Which tends to be pretty populist in my mind. But you tell me what you think.
I think that at the time public sentiment strongly favored fed policy that kept interest rates low or zero, resulting in lower student loan and mortgage rates, and QE, which resulted in growing IRA and 401k balances. I also think that it’s true that rising equity markets under our current tax climate exacerbate wealth inequity. But I think the tax code should probably be shouldering the majority of the blame, not fiscal policy that leads to rise in asset values.
I also think being the lone dissenter is good for getting your name on TV.
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We disagree, so we can agree to that.
89% of the financial assets in the US are owned by the top 10%. What we’ve seen with this non-democratic deployment of monetary policy is one of the great upward transfers of wealth in the history of this country. And if you’d read the book, which I know you haven’t, you’d realize there wasn’t just one dissenter. There were many, though the intra-politics of the Fed erased the others.
Well, although you’ve expressed interest in exploring the counterfactuals with Leonard, I know you didn’t. So what I’m particularly interested in is what Leonard and Hoenig believe what would’ve occurred had his stance carried the day. And yes, I think we can also disagree about whether it should be the job of bank presidents to solve inequality. Other than @OTPLefty. I’m sure he could do it.
That all may be true. Don’t know much about either of them. Just putting it out there.
Jury’s still out on whether I’ll read the book (for my own anxiety). But I think issues this big and complex are rarely if ever explained by one theory.
There’s probably kernels of causation among many different theories around this stuff.
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Plenty of interviews with Leonard out there where he discusses this, if you care.
Huh?
Adam Tooze’s NYT review was very critical as well, and he’s hardly one to toe the banking elite party line.
Hadn’t read that one yet. I’ll take a look.
Of course it’s complex! We have a broken Congress, we have ineffectual institutions (IRS, SEC, DOJ, etc), and our information streams are as partisan as possible. That’s a large subtext to then discussing the Fed’s actions.
Tooze’s points about fiscal and taxation solutions are correct. But they don’t happen because we live in a broken democracy. And I would hardly say his review is “very critical” lol
Okay. You can be the judge of whether it’s very critical or not. But “trite,” “melodramatic” “muckraking” isn’t usually my bag.
We can pin the ineffectiveness of the IRS almost entirely on congressional budgeting/funding.
Edit: As well as an over complicated tax code.
I found out over the weekend that I frequently tailgate and attend soccer games with Mr. Leonard’s cousin. It was only kind of weird describing that I heard him interviewed on a golf-adjacent podcast.
I thought it was a great podcast. As someone that has been in banking for 20+ years I continue to be amazed at the staggering amount of money that is out there. People (pension funds, insurance companies, wealthy people) are desperate for yield so there is so much money chasing returns. So they give these PE guys tons of money. They have to do something with it so they go out and are buying companies at 13 to 15 x’s adjusted EBITDA. Us bankers showed little discipline and funded many of these transactions. My bank is an agricultural bank where land prices have risen to such a degree that there is no possible way cash flows from growing the crop will ever offer the buyer a return.
Assets are overvalued to such a degree that the Fed is “stuck in a moment you can’t get out of” to quote the great U2 song. You either drain the system of all that liquidity and likely crash assets or you inflate and destroy the dollar. Either way it is going to end bad.
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Nice U2 reference, btw (even though the Refuge seems to hate them).
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I don’t know how you guys get up and go to work everyday. That’s not a dig, but a legit statement with the dire outlook you have.