2017-08-19 — blogspot.com
...before we segue to the mess in Washington, there are as well major near-term uncertainties with respect to global monetary management. There were indications this week that both the ECB and Federal Reserve lack the confidence and consensus necessary to communicate a plan for unwinding what have been years of unprecedented monetary stimulus. It's not confidence inspiring.
There should be little doubt that the boom and bust dynamics experienced over recent decades have taken a toll on our nation's social and economic fabric. And while many want to blame "globalization," I believe much that we label "globalization" would be more accurately understood as fallout from years of unfettered global finance. Could NAFTA have been so destabilizing to U.S. manufacturing without endless cheap finance flooding into Mexico (and EM more generally). How dominant would China be today without essentially limitless amounts of virtually free "money" to finance over-investment the likes of which the world has never experienced?
I strongly believe that unfettered finance has been instrumental in the long period of U.S. deindustrialization -- the transformation from a manufacturing powerhouse into an experiment in a consumption and services-based economic structure. Bubbling securities markets and booming Wall Street finance were integral to this fateful structural shift.
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