By David Stockman
The information flow in a $17 trillion economy is far too vast to be digested and assessed by the 12 mortal members of the FOMC, and their policy control instrument—-the bludgeon of interest rate manipulations—-could not possibly shape its short-run course in any event. That’s especially true since the macro-economy is not a closed system, but one open to every manner of complicating and countervailing influence from trade, capital flows and financial impulses in a $80 trillion global economy.
Still, the Keynesian policy apparatchiks have not even an inkling that they are attempting the impossible or that their patter about objectives, forecasts and policy actions have gotten downright moronic. And here’s where the EC’s latest retreat on its official forecast is so ludicrously illustrative.
Given the massive complexity of the global economy—plus the tidal forces being unleashed by Japan’s yen destruction campaign, the cooling of China’s monumental construction binge, the dead-in-the-water bankruptcy of most of Europe and the massive shift of income and wealth to the top 1% in America— no one in their right mind should attempt to predict GDP growth to the exact decimal point three years into the future or even one year for that matter. There are imponderables, uncertainties and aberrations everywhere, and none of them are in the Keynesians’ primitive models.
(For the rest of the article, click the link.)