tag:blogger.com,1999:blog-582368152716771238.post3034361051042861225..comments2024-03-28T05:14:02.071-05:00Comments on The Grumpy Economist: Cheers for PowellJohn H. Cochranehttp://www.blogger.com/profile/04842601651429471525noreply@blogger.comBlogger26125tag:blogger.com,1999:blog-582368152716771238.post-15562852686394041972023-01-15T09:48:14.923-06:002023-01-15T09:48:14.923-06:00John, thanks for posting about this. I'm awar...John, thanks for posting about this. I'm aware that there has been discussion for some time on the left about using the Fed to enforce lefty policy. But why does he make this statement now? I agree, it's a forceful speech, but is it enough? Or is it a last ditch effort to hold the Fed to its mandate before the lefts makes it just another agency enforcing it's policy du jour (as it does with all agencies)?<br /><br />Remember, to the Mighty Climate Superheroes of the left, nothing can stand in the way of Saving Humanity from the Eternal Fiery Damnation that's Sure to Consume Us if We Continue to Eat Food and Build Houses!! Will a mere speech even scratch - much less blunt - their zealotry? jimnoreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-29998069360276016812023-01-14T14:55:19.937-06:002023-01-14T14:55:19.937-06:00I sometimes wonder if full employment is just supe...I sometimes wonder if full employment is just superfluous. Prices reflect relative scarcity and when you throw in derived demand for labor demand, price stability might be enough. Sometimes I ponder and muse if the dual mandate is just a set of monetary handcuffs. Mykel G. Larsonhttps://www.blogger.com/profile/17128735421035292909noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-8620821040784905832023-01-13T20:53:57.031-06:002023-01-13T20:53:57.031-06:00Don't discount yourself too much John. You hav...Don't discount yourself too much John. You have some of the best prose I've seen from academic economists. The profession would be far better off if everyone could write as well as you do. Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-17222032481683766472023-01-13T07:29:12.439-06:002023-01-13T07:29:12.439-06:00Sigh! As usual no good deed goes unpunished. BTW, ...Sigh! As usual no good deed goes unpunished. BTW, if I remember right, rates were being raised prior to the Midterms with Dems in "control". Fallible humans make mistakes, even if they are in high positions of responsibility. And when you get several fallible Feds in the same room trying to do the right thing, mistakes will be made. Seems they caught it and are trying to do it right this time.Herbertnoreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-73851442207535525732023-01-12T14:02:05.765-06:002023-01-12T14:02:05.765-06:00I am not sure they got the sign wrong. Most of the...I am not sure they got the sign wrong. Most of the transition stress tests have looked at what happens if the price of carbon increases. All that the regulators can do (assuming they stock to risks) is increase the cost of capital. The error is conflating one with the other (and then further confusing things by introducing an oil price spike). One of the subtle changes between phase 1 and 2 of the NGFS climate scenarios was they moved from talking about a carbon tax to a shadow price. I am not sure many people understand the significance in that (other than it seems more realistic)?Nicknoreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-55448324382875509452023-01-12T12:20:55.623-06:002023-01-12T12:20:55.623-06:00The risk horizon for bank regulation is one year. ...The risk horizon for bank regulation is one year. Do we really need any further discussion on this?Ted Durantnoreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-60668194276747134872023-01-11T18:26:19.309-06:002023-01-11T18:26:19.309-06:00Grumpy economist -- give yourself credit as your a...Grumpy economist -- give yourself credit as your analyses are concise & cogent ( w.r.t.I wish I could ever write something with such clarity and brevity)Kwakuhttps://www.blogger.com/profile/17935724620407222452noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-28319174329906099442023-01-11T14:02:02.479-06:002023-01-11T14:02:02.479-06:00I am curious about your claim of balloons not enco...I am curious about your claim of balloons not encountering the greenhouse effect. I’m not even sure what that means. Do you have any sources where I can learn more?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-35478158091182719952023-01-11T11:54:13.889-06:002023-01-11T11:54:13.889-06:00What can Powell do with a structural deficit of 4 ...What can Powell do with a structural deficit of 4 percent, increasing to 10 percent anyway? <br />Nothing. <br />So tell us how we don't get 4 percent inflation on the horizon for a very long time..<br />Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-63871551107479390002023-01-11T11:48:50.918-06:002023-01-11T11:48:50.918-06:00"it's perfectly obvious that 'climate..."it's perfectly obvious that 'climate financial risk' is BS."<br />Spot on. In the financial services corporate world, you can't imagine the gyrations and distortions people make to "fit" this notion in risk management policies. Wasted customer and shareholder value at the end of the day.Francisco Ordunanoreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-22433559752623168942023-01-11T10:18:55.483-06:002023-01-11T10:18:55.483-06:00He needs to tell Congress to get rid of the Fed’s ...He needs to tell Congress to get rid of the Fed’s dual mandate. Congress’ fiscal and regulatory policy are the appropriate means of affecting growth and employment. Let the Fed focus on price stability.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-10251501910603407702023-01-11T09:42:22.759-06:002023-01-11T09:42:22.759-06:00The imperative to "stick to their knitting&qu...The imperative to "stick to their knitting" would also seem to undermine purchasing mortgage-backed securities, corporate bonds, commercial paper, and a host of other credit market interventions which are, at the end of the day, quite tangential to monetary policy. Jeff Lackernoreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-59750867011375357632023-01-11T09:23:02.834-06:002023-01-11T09:23:02.834-06:00Jay Powell is absolutely write. CBs have no mandat...Jay Powell is absolutely write. CBs have no mandate for pursuing climate policies. Now, if it is thought that they can be instrumental for that matter (and they can), the elected powers may give them such mandate.Francois Meuniernoreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-88357085747546146662023-01-11T07:50:03.376-06:002023-01-11T07:50:03.376-06:00This was 100% a political speech...if Democrats ha...This was 100% a political speech...if Democrats had won the house...he would have said Climate Change was the main priority. We know the main priority...enrich wall street and the richest and protect Government! The FED hate Main Street...look at their ABJECT failure on inflation...their OUTRIGHT LIES!Guyhttps://www.blogger.com/profile/03057507938210279134noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-52163085532742783492023-01-11T07:48:10.780-06:002023-01-11T07:48:10.780-06:00you actually believe his LIES? He said this to pro...you actually believe his LIES? He said this to protect himself against the GOP in congress!Guyhttps://www.blogger.com/profile/03057507938210279134noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-51415613844238831522023-01-10T21:12:58.111-06:002023-01-10T21:12:58.111-06:00Powell might want to add that some countries don’t...Powell might want to add that some countries don’t even have a dual mandate. The charter of the Swiss National Bank has only price stabilityAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-20022850846119371582023-01-10T19:28:31.370-06:002023-01-10T19:28:31.370-06:00If only Powell were also running Treasury. If only Powell were also running Treasury. Texas Jacknoreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-13549338937088843442023-01-10T19:04:27.834-06:002023-01-10T19:04:27.834-06:00It would be a better world if more civil servants ...It would be a better world if more civil servants had similar concern for the integrity of their exercise of power, as you note and I would broaden. <br /><br />Corruption is the use of power for ends based on personal preference. The eunuchs of Imperial Beijing or Byzantium have nothing on our servants.<br />Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-3885229135062147752023-01-10T18:58:56.224-06:002023-01-10T18:58:56.224-06:00Canada is a case in point. Canada's federal c...Canada is a case in point. Canada's federal cabinet is moving aggressively to reduce GHG emissions from industry, agriculture, transportation, and real estate, in order to earn bragging rights at international fora dedicated to forcing the curtailment of petroleum and natural gas production globally by the year 2050. Threatened industries are located in the western provinces which taken together produce crude petroleum and agricultural products that contribute a significant share of Canada's hard foreign currency income-producing exports. Canadian federal regulations that call for aggressive curtailment of GHG emissions ahead of industry's ability to develop and deploy the technology necessary for compliance with those regulations will force industry to curtail investment and production output. Given the capital intensity of the affected industries, aggressive regulatory moves threaten the major commercial banks that have significant exposure to borrowers in those industries. As this is not a theory possibility, or an academic 'what-if' scenario play, but a current development in Canadian federal government regulatory moves, Mr. Surprenant's observations are germaine to the topic under discussion.Old Eagle Eyehttps://www.blogger.com/profile/05270080708077871311noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-29176207967948459492023-01-10T18:46:37.203-06:002023-01-10T18:46:37.203-06:00Right. I am green and I believe in taxing fossil f...Right. I am green and I believe in taxing fossil fuel consumption. Central banks have no business in the climate policy arena.Benjamin Colehttps://www.blogger.com/profile/14001038338873263877noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-46928587454695537132023-01-10T18:29:15.682-06:002023-01-10T18:29:15.682-06:00In the last five billion years CO2 has never been ...In the last five billion years CO2 has never been a lead indicator of warming, that despite the fact that several times it has been much higher than today. Additionally, over the past seventy years nearly 47 million weather balloons have been sent skyward and not one has encountered the greenhouse effect. Thus, in my view, the term "BS" is spot on. <br />Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-17843955186678729422023-01-10T16:16:32.899-06:002023-01-10T16:16:32.899-06:00We shall see in 2023... I keep hoping that the Jay...We shall see in 2023... I keep hoping that the Jay Powell of today is not the Jay of his youth, raping and pillaging industry by using excess liquidity provided by the Fed and turning the private sector into a debt ridden financialized bomb. <br />If he can somehow wring out the trillions of excess liquidity that quantitative easing and an insane government has dumped into the system without completely train wrecking the economy and the world then he should be hailed as a hero.<br />He sees climate change for what it is, a distraction from the Herculean task that faces him.Frank Rowleynoreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-61057270929388809462023-01-10T14:59:55.106-06:002023-01-10T14:59:55.106-06:00Climate risk with regard to the banking industry h...Climate risk with regard to the banking industry has only one aspect to it in my view: How does it affect the creditworthiness of a given borrower of a banking company, and in the aggregate the riskiness of a given bank's loan portfolio?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-6881379483653444592023-01-10T12:44:35.728-06:002023-01-10T12:44:35.728-06:00Nice store you got there, it would be a shame if a...Nice store you got there, it would be a shame if anything were to happen to it.... Yes, but this crowd just got the sign wrong. What will climate policy (restrictions on fossil fuel development before alternatives are available at scale) do to fossil fuel profits? That shouldn't have been hard to answer! See the environment tab, lots of previous posts take up this issue that I didn't think I had to delve in to "transition risk" here. John Cochranenoreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-71855601990127305152023-01-10T12:21:51.342-06:002023-01-10T12:21:51.342-06:00Great news, courageous stance. Hopefully not ephem...Great news, courageous stance. Hopefully not ephemeral! Livio Mayanoreply@blogger.com