“Financial conditions in the United States have recently become less supportive of growth”
- and thus begins another memorable “Humphrey-Hawkins” testimony from the head of the Federal Reserve, Janet Yellen.
The first go round is with the House Financial Services Committee followed by the Senate Banking Committee. Should you wish to be more discouraged than you are now by the quality of Presidential candidates just tune in live to C-SPAN or Google or Youtube or whatever fits your fancy for an awakening you really do deserve. Most of these characters, Senate and House, think Economics is something they studied in high school in order to make cookies, brownies and pies. The collective intelligence of these clowns is almost frightening. And they’re our leaders.
The problem is compounded by the fact that Yellen’s grasp of what is happening is almost as bad, but not quite. She can be excused for being mired in a philosophy (Keynesianism) that has at least some basis, though failed as it is. Her audience, the Senate and House members, however, have no foundation, are baseless and totally clueless.
Allow me to help both parties out with a little Economics lesson (not Home, we’ll dispense with the cookies). My subscribers know this by heart. I only wish the powers to be did.
- Everything begins with a sale whether it’s Chevron, Macy’s, Caterpillar or Sears. Sales have fallen off a cliff. Oil is stockpiling, retail stores are closing, heavy equipment is sitting idle and cash registers have stopped ringing.
- Since there are no sales there is no need for production whether it is oceanic cargo containers, railroad or cross country trucking, production and transportation of goods has come to a standstill (inventory, however, is still stocked to the brim on the shelves).
- Since production has halted employees are no longer needed. Of course, bartenders and waitresses have become the new manufacturing sector. Their time, however, also will come just as sales clerks are now a thing of the past.
- Being pink slipped means no paycheck except what the government doles out. With no paycheck there are no sales and the vicious cycle starts all over again.
Being a Keynesian, Ms. Yellen believes she and her cronies can control and alter the age old business cycle.
SHE CAN’T – NO ONE CAN.
Unfortunately, Capital Hill will demand that she “get back to work” which means stop raising interest rates and start printing more money which of course will speed the cycle up even faster.
I agree with her “financial condition” statement but would drop the word “recently” since this has been occurring “continually” since the Fed’s beginning in 1913.
Please tune in to this spectacle but only if you have a strong stomach.
For those Federal Reserve officials, Senators, Congressman and TownHall readers wishing to learn more simply turn to BillTatro.com.