BEWARE when the gods complain

“Occasionally he stumbled over the truth, but hastily picked himself up and hurried on as if nothing had happened.” ― Winston Churchill

“Neurotics complain of their illness, but they make the most of it, and when it comes to taking it away from them they will defend it like a lioness her young.” ― Sigmund Freud

“When a politician views society from the seclusion of his office [and] is struck by the spectacle of the inequality that he sees ... deprivations [and poverty] contrasted with luxury and wealth …  perhaps [he] should ask himself whether this state of affairs has not been caused by legal plunder.” ― Frederic Bastiat

Walking among the mortals whose well-being and self-esteem he so bravely manipulates with his subtle choices of wise words about monetary policy, Fed Chairman Jerome Powell appears to be at least confused and, perhaps, even unhappy lately about what he sees on the earth … or at least that part of it that represents the American economy. And this can be quite dangerous for believers and unbelievers alike … because when the gods are confused or unhappy … stuff happens.

The relatively slow growth of middle class incomes, widening inequality, and declining prospects for the poor to move up the economic ladder are “crucial” problems for the U.S. to tackle in coming years, Federal Reserve Chairman Jerome Powell said on Thursday. “Many Americans believe being middle class means having a secure job and the ability to save. [But] in recent decades, income growth for middle-income households has lagged."
https://www.reuters.com/article/us-usa-fed-powell-idUSKCN1SF1JS

In a speech at a Fed research conference, Powell said that incomes have grown more slowly for middle-class families since the 1970s than for higher-income households. “Sound public policies can support families and businesses and help more Americans reach and remain in the middle class,” he said. Powell did not offer solutions to the problems he raised but said the Fed’s two-day research conference would examine these issues through various research papers.
https://www.pbs.org/newshour/economy/powell-says-policies-are-needed-to-address-slow-income-growth

Not me

But, rest assured, the throbbing swells and crashes of Capital valuations and the persistent [sometimes slower and sometimes faster] decline of the economic fortune and political influence of Labor and the Middle Class since 1970 cannot possibly be attributable to the increasingly desperate, deviant and doubled-down monetary policies with which the omnipotent Fed continues to experiment on the economy and the environment. Surely other things are to blame for these undesirable conditions and it is these other things that must be “tackled” … not enlightened monetary policy!

“The degree of inequality we see today is primarily the result of deep structural changes in our economy that have taken place over many years, including globalization, technological progress, demographic trends, and institutional change in the labor market and elsewhere. By comparison to the influence of these long-term factors, the effects of monetary policy on inequality are almost certainly modest and transient.” ― Ben Bernanke 2015, quoted in "Distributional Effects of Monetary Policy: An Opportunity for Austrian Economics", Sebastian Muller, ThinkMarkets, 2018

"As technology evolves, it requires rising skills on the part of the people ... [and] U.S. educational attainment has not moved up as rapidly as it has in other countries." ― Jerome Powell's explanation of growing American income inequality on CBS' 60 Minutes, quoted in "Fed Chairman Powell Keeps Peddling A Dangerous Economic Myth", Pedro Nicolaci da Costa, Forbes, 2018

Ya think so?

However, anyone who will take the time to consider the obvious relationships between interest rates, Capital investment and Labor utilization/wages in the determination of Man's Material Well-Being will eventually suspect [if not immediately conclude] that the injection of increasingly massive amounts of fiat credit into the economy to permanently repress interest rates

• leverages, subsidizes and enriches Capital at the expense of Labor which is ALWAYS in competition with Capital for the work the economy needs done and
• usurps Labor’s rightful economic and political roles as the generator of savings [from Labor’s wage surplus] needed to fund both Capital and Government alike.

Running for cover

In reality, Powell’s complaints are nothing more than a dishonest attempt to shift blame away from the Fed’s guilt as a central economic planner in producing the very kinds of results from which it promised deliverance if we would only give it autonomous power to “manage” our money and banking. Its QE “policies” and its “macroprudential” regulations have hopelessly debauched both our currency and our markets … as we remain its largely clueless victims.

What Powell has failed to realize [or at least to admit] is that central banking as a radical and powerful form of central planning has finally

• as Keynes predicted, destroyed the social medium [a common currency] and
• as Hayek predicted, subverted the political fabric [the rule of law]

on which market capitalism and private property depend and in so doing has paved the way for even more procrustean pathologies [such as currency and trade wars and Modern Monetary Theory] which will sweep away even Powell and his beloved Fed in violent cross-currents of sociologically reactionary collectivist totalitarianism as special interests directly vie with all comers for the reins of economic and political power.

“There is no subtler, no surer means of [destroying the Capitalist System and] overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.”  ― JM Keynes, "The Economic Consequences of the Peace", 1919

“Most planners who have seriously considered the practical aspects of their task have little doubt that a directed economy must be run on more or less dictatorial lines. … Individualism must come to an end absolutely. A system of regulations must be set up, the object of which is not the greater happiness of the individual, but the strengthening of the organized unity of the state for the object of attaining the maximum degree of efficiency, the influence of which on individual advantage is only indirect. … It should never be forgotten that the one decisive factor in the rise of totalitarianism on the Continent, which is yet absent in England and America, is the existence of a large recently dispossessed middle class.” ― FA Hayek, "The Road to Serfdom", 1944

Thank God for small blessings

Our only consolation is that, in retrospect, Powell and his fellow god-frauds at the Fed will someday be revealed for the proud but impotent manipulators they always were and really are and will be laughed into derision … but, sadly, not by us … for we are the “people who imagine a vain thing” … who imagine that central bank manipulation of our common currency will somehow improve our individual and communal lives.

Why do the heathen rage, and the people imagine a vain thing? The kings of the earth set themselves, and the rulers take counsel together, against the Lord, and against his anointed, saying, "Let us break their bands asunder, and cast away their cords from us." He that sitteth in the heavens shall laugh: the Lord shall have them in derision. ― Psalm 2