Bizzaro World

Bizzaro World was a fictitious planet found in comic books which featured situations that were unexpected or opposite to what would be expected. It seems to me as I try to write this blog that I am having an increasingly difficult time fitting into our current Bizzaro World.

Maybe this is what always happens. People live and they get old. They find that the world around them has changed. They no longer understand how the world works. They are ready to spend the rest of their lives grazing on the lower 40.

I’ve never had trouble finding a good topic to write about. I have written over 500 posts for this blog in the last 10 years. But I have to say that I am wondering how I fit into this bizarre world we now live in.

Last week I wrote about the Fed. How bizarre is that? After a century of trying to keep inflation low, the Fed now says they want to make inflation high. Zero interest rates for three or more years? What does that even mean?

I often write about economic growth. But no one seems to care much about that topic. Economic growth depends on the growth of productive inputs like the growth of the labor force and its productivity. Have either candidate for president said a word about those topics?

And then there are the usual ups and downs of the business cycle. Macro looks at the key components of spending to discuss these cycles and how to end recessions and start expansions. But apparently, the sizes of the recent changes in spending from one quarter to the next are so huge that they almost lose meaning. What does it mean when consumer spending falls by 30% one quarter and then rises by 50% in the next one? Bizarre.

And isn’t it crazy that we don’t seem to care how large the money supply and the national debt are? We even have a new theory called MMT which says debt is irrelevant. Seriously? When is the last time your friendly banker told you not to worry about your debt?

And what about letting markets work? Isn’t it interesting that in what appears to be one of the biggest recessions in decades, firms raise prices in the face of declining markets?

And what about supply and demand? Supply left through the back door. Better said, everything now seems to depend on the resurrection of demand for goods and services. And we need a little Viagra to get demand up and going again. The government wants to give people more money so they can spend more. Presumably, that will cause firms to hire more workers and produce more goods and services. But how can we spend more when stores aren’t really fully open or they can accommodate only a small group of buyers. Many of those stores will never open again.

Our government says our challenge is raising demand and they are spending trillions to get us to buy more. But the real constraint is Covid and that restricts output. The government is pissing away our money, putting a cast on your right arm when your left arm is broken. Bizarre.

I’m sure that a lot of this has to do with special problems associated with Covid but I am guessing that there is more to it. Maybe it’s getting to be time for me to head out to pasture. I could start writing about duck cloacas but then my editors might wonder about that choice. Of course our government does function a bit like a cloaca so you better get your dictionary out.