> the tone of the mainstream media narrative around central bank actions is always technocratic.
That's true, but I don't think anyone outside of finance actually pays attention to the MSM narrative around central banks. Rather they get all their information from memes that have little basis in reality.
> I don't believe that central bankers are brilliant economic engineers with deep insights into the ideal economy
They aren't supposed to be. They're just supposed to make sure the money in the economy is circulating in a way that keeps it from spiraling to a point of no return, much like an ER doctor ensures that oxygen is circulating in a patient's body to keep it alive. Most criticism of central banking is akin to criticizing an ER doctor for helping the fat cells more than the heart muscles.
> Rather they get all their information from memes that have little basis in reality.
What was the last popular economics meme? Money printer go brrr?
> They're just supposed to make sure the money in the economy is circulating in a way that keeps it from spiraling to a point of no return, much like an ER doctor ensures that oxygen is circulating in a patient's body to keep it alive.
I don't think so. In the US, the current rate increases to control inflation are not a matter of life and death. The bankers are speculating they have an opening to reduce inflation by raising rates with minimal negative side effects. They're pushing toward an ideal (or at least up a believed gradient), not saving us from Armageddon.
I'm not strictly talking about humorous memes like "brrrrr". I mean there are a bunch of ideas that loosely resemble heterodox economics except they're even less sensible. For example:
- The only "real money" is gold/crypto
- "Wtf happened in 1971?" is basically advertising the return of the gold standard.
On the other side, you have memes that justify free money and loan forgiveness like:
-Debt is just make believe that can simply be wiped out with the stroke of a pen with little consequence
- TARP bailouts were handouts to the rich, so we deserve them too
>They're pushing toward an ideal, not saving us from Armageddon.
Most people aren't criticizing the interest rate hikes. They primarily criticize things like quantitative easing and bailouts do prevent economic collapse.
Agreed on all counts. I admit I find the graphs of trends starting in 1971(-ish) fascinating, but of course the 1971 graph people never talk about the combination of short-term drivers (e.g. oil supply shocks) and long-term drivers (e.g. globalization, computer revolution) that shaped the economy over this same period, or the difficulty of actually explaining what these trends had to do with closing the gold window.
Life is full of fascinating but ultimately misleading coincidences.
The "Wtf happened in 1971?" meme is the poster child for being skeptical of mono causal explanations for complex issues. There have been a ton of other events since 1971 that are likely major contributors. In addition to the things you pointed out, 1972 is the year that Nixon went to China. Automation has replaced a lot of workers. The size of the workforce increased dramatically. We experienced the dawn of the information age. All of those things are going to contribute to stagnant or reduced real wages. Especially for those at the bottom of the wage distribution who are going to be most vulnerable to offshoring and automation.
And I would guess that monetary policy has disproportionately benefitted the wealthy, but that's only because I assume that all policy benefits the wealthy unless it's specifically designed to help the not-wealthy.
Nobody remembers that the gold standard used to be viewed as a "cross" on which poor farmers were crucified, hence we needed to massively expand the money supply with silver.
Even policies specifically designed to help the not-wealthy often disproportionately benefit the wealthy.
Yes, in addition to demonstrating the weakness of mono-causal explanations it's also a good use case for Chesterton's Fence. We moved away from the gold standard for a lot of reasons. For example, as bad as inflation can be deflation is unquestionably worse. And we haven't had any major shocks to the economy that are anywhere near as severe as the depressions that were experienced prior to ditching the gold standard. This could just be good fortune, but you at least have to consider it when deciding if you want to go back to hard money.
Also, on several of the charts it's fairly clear that the inflection point isn't 1971, and some of the other policies with a fairly obvious causal relationship with widening of income inequality (like top bracket tax cuts) are those typically endorsed by those wishing to return to the gold standard
Most goldbugs, and many crypto boosters, are just hyper-individualists. "I keep my money and it doesn't lose value" is the only criterion they care about in a monetary system or a tax system. Hence the support for both constricting the money supply and low taxes, especially on the high-income bracket they usually reside in.
That's true, but I don't think anyone outside of finance actually pays attention to the MSM narrative around central banks. Rather they get all their information from memes that have little basis in reality.
> I don't believe that central bankers are brilliant economic engineers with deep insights into the ideal economy
They aren't supposed to be. They're just supposed to make sure the money in the economy is circulating in a way that keeps it from spiraling to a point of no return, much like an ER doctor ensures that oxygen is circulating in a patient's body to keep it alive. Most criticism of central banking is akin to criticizing an ER doctor for helping the fat cells more than the heart muscles.