In Part 2 we noted that the key main street economic metrics reflect no MAGA magic whatsoever. Since the election, inflation-adjusted paychecks have gone nowhere and almost anything else you can name—-business investment, real retail sales, productivity, employment and even real GDP—-continue to slog along in the tepid “recovery” channel that has prevailed since 2010.
Notwithstanding the Donald’s tweets, that’s happening because the foundation of the US economy is rotten to the core. And that lamentable condition is the product of three decades of central bank driven Bubble Finance—that is, bad money, not bad trade deals, free markets or nefarious foreigners.
The real culprit behind the economic distress in Flyover America that brought the Donald to the Oval Office, therefore, is a rogue central banking regime that has functioned to:
- bury all sectors of the American economy in unsustainable debt ($68.5 trillion);
- massively off-shore jobs and production of goods and services owing to the Fed’s specious 2.00% inflation target and the wage and cost inflation artificially induced thereby;
- transform money and capital markets into gambling arenas that massively siphon real resources from main street to Wall Street;
- financialize the U.S. economy by decoupling growth of asset values from gains in production and income; and
- drastically mal-distribute the windfall gains from financialization to the very top of the economic ladder.
Needless to say, the Donald’s fondness for protectionism, “low interest” and epic fiscal profligacy has absolutely nothing to offer: It will be making the symptoms far worse and has left the Keynesian money-printers’ posse unchallenged and fully empowered in the Eccles Building.
And that will prove to be a fatal mistake—-the equivalent of Trump signing his own political death warrant.