Everybody
knows that a rowboat operates better with two oars than one. The same is true for economic policy – it
works better with BOTH monetary policy and fiscal policy. Monetary policy is controlled by the Fed,
which has done the heavy lifting to get the economy out of recession. Fiscal policy is controlled by Congress,
which has done nothing. If the opening
page to your internet connection is not set to www.usdebtclock.org – why isn’t it?
Dr.
Hyman Minsky was a Keynesian (think: Democratic) economist from Washington University who popularized the
very Classical (think: Republican)
economic belief in the “Minsky Moment.”
He argued that debt will keep expanding until such time it cannot, when
the debt markets will then collapse suddenly.
The problem is that nobody knows when that moment will be. I do know that moment will be ever-closer --
as long as Congress remains useless. (It
should be illegal for any elected official to say “if only the other side would
work with us!”)
The
borders of political districts are redrawn ever ten years, based on the latest
census data. The current practice is to
allow elected politicians draw the borders to include their likely voters and
exclude others. Thus, elected
Republicans run in purified districts that are safe for Republicans. The same is true for Democrats. The problem is that pure districts
discriminate against moderates of both parties who can accomplish things and favor purists (think: extremists) who can obstruct things.
This means Congress will remain useless until the next census in 2020 at
least. The question is whether the
Minsky Moment will occur before then?
Discrimination against moderates is not prohibited by the Constitution.
Neither is the Minsky Moment!
