By MN Gordon – Re-Blogged From David Stockman’s Contra Corner
Fiscal policy, as opposed to monetary policy, is more readily understood by the general populace. Income taxes, budget deficits, the national debt. These are all tangible things the average working stiff can grasp a hold of, if they care to.
The consequences of ZIRP or QE, however, are less obvious to the casual observer. They experience the wild booms and busts of central bank caused price distortions yet never connect the dots back to the Fed. They may falsely condemn capitalism, and never scratch below the surface where the Fed’s money and credit games are lurking.
The industrious wage earner may also find that, despite working harder and harder, their lot in life never improves. In fact, it may even regress. Still, many won’t recognize heavy handed monetary policy as factors for their disappointment.
The recent college graduate, making a subsistence wage at a franchise coffee shop, buried under $50,000 in student loan debt, may be keenly aware that something is radically wrong. How come the cost of school is at such disparity with the value it provides, they may ask?