With Meta announcing an 11,000+ layoff of its employees, will the US Federal Reserve finally admit that its policies are hurting the workforce?
All kinds of expert knowledge could do better with a little more common sense, especially economics. Since it is difficult to comprehend for most people, countries have been giving free rein to economists to manage their economies ‘expertly’.
But 2022 was the year in which yet another folly of modern economics was exposed. Modern economic theory had long contended that more and more free market economics will avert war. But it now seems that Putin hadn’t studied his economics well.
Or, maybe he was too brilliant at real economics, and not these kinds of economic theories that lack commonsense. Over the more than two decades he has been in power over his superpower nation, he counted on and exploited to the hilt such foolish Western theories.
Now the West is crying for his blood, for Putin to be prosecuted for his war crimes. He surely qualifies for that, for both the destruction he senselessly unleashed on Ukraine, killing not only tens of thousands of Ukranians but for letting tens of thousands of reluctant Russian soldiers to be killed in a totally unwanted war.
While such damage is limited to Ukraine and Russia, the greater damage inflicted by Putin is now being felt across the world. Yes, the whole world is reeling from the economic fallout of Putin’s aggression, with inflation soaring to levels unseen in recent years.
This is why the very idea of a superpower is potentially lethal for the rest of the world. If in doubt, look at the other superpower. If you thought it is the US of A, you are slightly off the mark. But before explaining this hidden superpower, a word needs to be said about how difficult it is to find something special in the US. It is called bipartisan consensus.
Take gun control, and there won’t be bipartisan consensus ever in the US, between the Right and the Left. Take abortion, and there will never ever be consensus between Republicans and Democrats. Yet, there is an unprecedented level of bipartisan consensus when it comes to someone.
Imagine someone handpicked by the Republican President George HW Bush, way back in 1992 for a key role in his administration. Now, imagine that same person being selected by Democratic President Barack Obama in 2012 for a higher role. Strange? Wait till you hear more.
Now, imagine the same person being elevated to a crucial role by Republican President Donald Trump. Stranger? Not finished yet. Now, imagine that same person being renominated by Democratic President Joe Biden in this crucial role. Biden can’t approve Trump ever, nor can Trump ever approve Obama, but when it comes to this guy all these enemies join hands.
Yes, you guessed right, this mighty superpower is this guy called Jerome Powell who has literally brought the world to its knees by his senseless war on American inflation, by repeated and massive interest rate hikes unprecedented anywhere in the world - he did four hikes each of 0.75% in quick succession - which beats even Putin’s senseless bombing of civilian targets in Ukraine.
In the process, Powell has pummelled almost all the world currencies, forcing their automatic or forced devaluation, and ensuring the supremacy of the US dollar. Today, countries across the world and their central banks are running for cover from this relentless bombing, and responding with their own senseless, or more correctly helpless, rate hikes.
It would be interesting to understand why Jerome Powell wields such excessive power in his hands. One just needs to look deeply at the education and career of this synonym or personification of bipartisan consensus to realize the truth. Educated to be a lawyer, and having worked mostly as an investment banker, Powell’s discontiguous public career is filled up with influential private stints at Wall Street majors like The Carlyle Group.
If Republicans and Democrats agree on someone, the outward reason is of course that he or she must be brilliant, but the hidden reason is often that such a person would have the highest backing from the Wall Street majors. Indeed, leading news sources like Time and Bloomberg, which even while backing Powell mostly, have acknowledged that Powell’s controversial Covid time policies were mostly beneficial only to the large corporations in Wall Street.
After the last FOMC meeting and rate hike, while answering a question whether the rates hikes are hurting the workforce, the shameless capitalist he is, Jerome Powell had the nerve to claim that it is not yet happening, as the jobs data is still strong and that workers are still more than comfortable, as they have too much demanding power still, by way of job options and higher salaries. Less than a week later, Mark Zuckerberg said mea culpa and fired 11,000+ of his Meta workforce.
Fortunately, some odd voices have started to appear, calling Powell’s bluff, by pointing out that his rate hikes are not only failing to contain inflation, but taking the American economy and the world economy to a dangerous and long-drawn recession. Powell-style rate hikes are simply senseless as this is an inflation cycle driven mostly by supply side constrictions due to the Covid aftermath, the Russian invasion of Ukraine and China’s once-bitten-twice-shy Zero-Covid policy. How can a demand side tool like rate hike compensate for this supply side crunch?