Much of general equilibrium is a result of the numerous benefits which accrued from earlier economies of scale. Hence today's expected "standard of living" also includes a high bar for economic access, given the wide array of special interests which have contributed to rigid definitions of equilibrium. Of course this approach has had its costs in terms of public and private economic engagement, along with a substantial backlog of debt structure to make it possible.
Remember when the majority of this structure was built? Only consider those 20th century decades, when inflation was actually a problem for all concerned. The Fed's earlier "party with the punch bowl" (attributed to everyone else? How exactly does that work?) serves as a reminder how opportunistic a credit driven central banking system can be. Some of the central banker overreaction to today's imaginary inflation, comes across a bit self righteous, given the reality of the situation.
Worse, are the excessive complaints about demographics, which are little more than the residual credit driven excuse for economic gridlock. One might call it a "pity party", since there are insufficient high incomes left for credit institutions to "plunder", oh and never mind the plentiful loose change still lying on the sidewalk which seemingly is not worth anyone's time. To put it politely, those excuses for economic stagnation are entirely inappropriate "hand wringing", due to the earlier excessive capture of income by debt creation in the years when it was possible to do so. Today's resulting economic uncertainty, helps to explain why aggregate spending capacity should always be honored with a level target. Instead, citizens are paying the price of imaginary inflation, to a large degree because central bankers and others were unable to resist the bounty of income capture, in the decades of high inflation when Baby Boomers were still young.
It is quite hypocritical to pretend high inflation is even an issue, when younger generations are still struggling for economic access. The fact that today's central bankers are reluctant to acknowledge the importance of nominal income representation, is just one reason why I'd like to see wealth creation which exists independently of the credit function now responsible for economic prosperity, or the lack thereof. I must admit that I dislike wealth creation which is entirely credit driven and discretionary, because it still allows central bankers to throw entire generations under the bus - only to (finally) throw a big party with all the attendant inflation (that of excessive lending capacity) when the "right" generation comes along. When that finally happens, what about today's posturing as to inflation being "just around the corner"? Ah who cares, it will all be forgotten by then.
Particularly problematic, is that political constituents are becoming less willing to honor mutual understandings for both economic and political obligations, as they presently exist. One could say there is an increasingly open challenge to present day equilibrium monetary needs, which also belies a lack of understanding, how important it is to maintain the wealth structures of the present, before societies find new systematic means for the wealth creation of the future.
When political leaders challenge monetary policy, they also do not understand the degree to which central bankers are already holding back, in the representation of already existing mutual economic agreements. No question, central bankers have already been reacting, to what some believe to be an excessive amount of liquidity. How else to explain recent Fed communications about running the economy "hot" for a time, when this would not take place under any circumstance? Hence some confuse the pricing levels of artificially constrained assets, with the monetary flows which are required to maintain business as usual.
Today, it seems many people reserve their anger for the "wrong" candidate or the "wrong" political response. As it turns out, most of my anger is still directed at the structural circumstance that were allowed to continue for far too long.
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