Schiff: Powell Can’t Address Stagflation

Peter caps off a very newsworthy week, in which the decisive Trump victory shocked the media class and another Fed rate cut was announced. Peter analyzes both events, arguing against the unbridled economic optimism of Trump’s supporters and criticizing Jerome Powell’s stance on Fed independence and his alarming lack of concern for a future of stagflation.

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Peter starts by highlighting the inconvenient trade-off between taxes and government spending. Trump promises new tax cuts, but these will need to be offset by spending cuts, lest the national debt balloons even further out of control:

Trump would have to maybe have a fireside chat in front of the American public and level with them.

He can say, when I was running for president, I promised a lot of things.

I promised a lot of tax cuts… we really need higher taxes if we can’t get some serious cuts in spending.

And so that’s what we’re going to try. I’m going to ask Americans to pitch in and tighten their belts.

While both the Republicans and Democrats like to take credit for for the country’s economic growth, the reality is that much of this “growth” is an artificial boom induced and sustained by decades of expansionary monetary policy by the Federal Reserve:

The problem was we didn’t have a strong economy. We had a bubble. We had a fragile economy.

In fact, we’ve been blowing a bubble in this economy ever since the 1990s. Greenspan is the architect of this house of cards.

He’s been blowing all the air in and every president going back to Clinton has been hiding behind his bubble and has been taking credit for the fake economic growth that has been a consequence of this ever-expanding bubble.

With the stock market lifted by Trump’s success, Peter argues the best time to switch into US equities is when the aforementioned bubble pops. It’ll be painful in the short-term, but that’s when stocks will be a bargain:

The time to load the boat with US stocks is not when they’re historically expensive. I’m waiting for blood in the streets. I want the collapse to happen…

Now, I know when we initially do that and the economy is in recession and everybody is pessimistic, that’s when I’m going to be optimistic, because I’m going to know that this is the bitter tasting medicine that we should have swallowed a long time ago.

Pivoting to the Fed rate cut, Peter points out that the Fed may have cut rates by less than they would have had Kamala Harris been elected instead of Donald Trump:

You would assume that if we’re going to have a stronger economy, the Fed should reconsider the rate cuts, maybe even pause or hike rates.

I thought, well, there’s no chance the Fed’s going to do that. Trump would go ballistic—they’re going to cut. And that’s exactly what they did.

One reason the dollar has been so strong is that people are thinking, well, maybe the Fed won’t cut as much now that we’re expecting a stronger economy.

Peter takes aim at Jerome Powell’s political cowardice, in which he uses the Fed’s independence as an excuse to avoid criticizing bad fiscal policy:

Being independent doesn’t mean you have to keep your mouth shut and you can’t speak your mind and you can’t be critical.

It actually means the opposite of it.

When you’re independent, you’re not influenced by politicians, so you could say whatever the hell you want to say.

You can criticize whoever you want to criticize, and that is exactly what his job is.

At Thursday’s Fed press conference, Powell dodged a question about the possibility of stagflation. Peter sees this as a major gaffe:

He [Powell] kind of says, “Well, our plan for stagflation is to hope there is no stagflation.”

Then he laughed, realizing how ridiculous that sounded.

I mean, what kind of plan is that? Your plan is to hope it doesn’t happen. .. Because obviously, it’s possible.

So, what are you going to do? That’s the question, not what you hope will happen. What’s your plan?

They’ve got no plan. That’s why they hope it doesn’t happen.

But, you know, Murphy has a law, right?

Anything that can go wrong will go wrong. We’re going to have stagflation.

Donald Trump’s has likely halted economic progressivism from corrupting the White House, but with the debt still expanding and the Federal Reserve still setting price controls on interest rates, the economy is far from healthy.

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Originally Posted at; https://www.zerohedge.com//

zerohedge
Economics , News , Politics , Science
December 7, 2024
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The Miserable Cost Of An Open Border

Authored by Seth Barron via RealClearPolitics,

The Biden-Harris experiment in dissolving the U.S. border has wrought massive changes to American society, most of which will not be understood for years, if not decades. Since 2021, U.S. border officials have had at least 10 million “encounters” with migrants, many of whom were allowed to enter the country. There is no telling how many more aliens entered the country without encountering enforcement agents. The population of the United States may have increased by as much as 15 million people in just a few years.

This massive flow of humanity crosses multiple national borders, involves every mode of transportation, accounts for billions of dollars paid in fees to smugglers, and describes a fantastically complex economy of suffering and hope. In an effort to get a handle on this human tide, noted muckraker James O’Keefe – known for his hidden camera “gotcha” interviews with abortionists, media executives, progressive nonprofit executives, and other degenerate types – traces the migrant onrush from its source, and seeks to trace the machinery of profit and influence that is conducting it from great removes.

“Line In The Sand,” the resulting documentary, is a remarkable and humane exposition, revealing perspectives and images American audiences have mostly been prevented from seeing. O’Keefe and his intrepid team begin on the U.S. side of the Mexican border, where we witness migrants crossing the border through holes that their guides have cut in a fence that serves as a target as much as a barrier. Infrared cameras show dozens of illegal aliens streaming toward “pick-up” vehicles on the U.S. side while smugglers – presumably cartel members – a few feet away taunt O’Keefe and his group. “What if I were to run up to them right now, what would happen?” O’Keefe asks his guide. “I would highly advise you against that,” he is told, in a classic understatement.

The fact that coyotes and other human traffickers are paid to assist northbound migrants with their passage is no scandal; we all know what their motivations are and why they are doing what they do. But O’Keefe documents multiple examples of U.S. Border Patrol agents standing idly by while illegal aliens cross, virtually under their noses. “Why aren’t you doing anything?” he asks. “Have a good day, guys,” a border agent desultorily responds before driving off in the general direction of the episode. Later, a migrant stands in front of a Border Patrol truck, clearly trying to alert the agents of his intention to surrender, but is studiously ignored until O’Keefe and his team call their attention to him.

There is a kind of sad comedy in the operations of U.S. border security, and O’Keefe is not unsympathetic to the absurd position that border agents have been put in. Trained to defend the national border and to serve as the first line of defense of American soil, these agents have been recommissioned as a perverse Welcome Wagon for illegal aliens, charged with making their undocumented and uninvited entrance to the United States as commodious as possible.

Looking to get deeper into the heart of this migratory avalanche, O’Keefe went deep into Mexico, to the city of Irapuato, about 150 miles northwest of Mexico City. Irapuato is a popular railway junction where thousands of migrants climb aboard “La Bestia,” or “The Beast,” a cargo train that chugs northward toward the United States. In the film’s most remarkable footage, O’Keefe and his team join with migrants, mostly from South and Central America, to ride The Beast, also known as “el Tren del Muerto,” or the Train of Death. O’Keefe talks to the migrants without condescension, asking them their destinations and what they plan to do when they get there, and their concerns about the perilous nature of the journey. We see the film crew race to jump on a moving train and clamber on top to sit in a pile of coal; O’Keefe is shocked at how truly dangerous this small element of the trip is and sympathizes with the migrants’ difficult choices. These scenes are among the film’s most affecting, along with the crew’s random encounter with a little girl who had just crossed the border after journeying from Guatemala by herself. There is a human dimension to illegal immigration, and O’Keefe does not ignore it.

However, there is also an impersonal dimension to this massive population transfer, and O’Keefe determinedly aims to uncover it – to put a face to the institutions and administrators that benefit from the rough injection of millions of people into American society. From government agents to bus companies to nonprofit resettlement groups to private contractors running huge, walled compounds housing thousands of children, O’Keefe doggedly tries to penetrate the mechanics of a system that resolutely hides itself behind a screen of silence, usually in the name of “safety” and “privacy.”

Some of the film’s more comical moments pertain to these segments, such as when the team follows some just-arrived Chinese migrants in San Diego to an employment agency, where other Chinese aliens, already in the country for several months, complain that it’s much harder to live in the United States than they had imagined. O’Keefe tries to sniff out a connection between the owner of the agency and more powerful actors, but it emerges that there really isn’t much going on; in fact, the owner asks O’Keefe if he knows of a way to apply for government grants.

Elsewhere, O’Keefe tries to get information about the operations of several huge residential centers for unaccompanied minors and tries to spin their refusal to give him access to the centers or submit to interviews as evidence of the existence of vast, government-funded child sex trafficking networks. But it seems more likely, though no less troubling, that the open borders policy of the last four years has created a tremendous humanitarian crisis of alien children roaming the continent by themselves, and the government is probably trying to keep them from becoming prey to sex traffickers while they sort out where to send them. Though O’Keefe does not uncover a salacious network of child predators, his vigorous pursuit of the truth does reveal the existence of a large, shadowy, government-funded, and lucrative system of child “welfare.”

So, “Line In The Sand” is correct in the larger sense that billions of dollars are being spent managing this human flow, and many people are getting rich off of it. The last thing these parasitical administrators of the nonprofit industrial complex want is for the border to close. O’Keefe does a great job of capturing in real time the corruption of a local New York City nonprofit called La Jornada, whose leader, Pedro Rodriguez, evidently perpetrates fraud, demanding fees for services that the city provides for free. O’Keefe also sends a Spanish-speaking reporter undercover into the Roosevelt Hotel, New York City’s main processing center for newly-arrived migrants, which offers him free housing, medical care, and even airplane tickets, even though the reporter explains that he has no identification of any sort. How, O’Keefe asks, in our post 9/11 security-obsessed era, are we to make sense of a system that admits millions of unvetted foreigners into the country, and then offers to fly them anywhere they care to go?

“Line In The Sand” is rough in parts, but intentionally so. Its subject is so sprawling and tangled that a neat and clean representation would be a lie. Even with a nine-figure budget – which this film assuredly did not have – a documentary about the border and the 30 million-footed human swarm that has crossed it would be messy and incomplete. But James O’Keefe and his small team have done something remarkable. They have taken on the decade’s biggest story, given it form, and preserved the humanity of its subjects. It is worth watching.

Seth Barron is a writer in New York and author of the forthcoming “Weaponized from Humanix.”

Tyler Durden
Sat, 12/07/2024 – 17:30