Few things are more exciting that watching Congressional testimony on Federal fiscal policy!🥳 (Think about it.....not boxing, not NASCAR, not a Packers-Lions game.....have as much action packed comments! 😏 You can just feel the intensity in the room.). We got inflationary fires all over the place while consumer demand is fanning the flames with insatiable need to buy and consume (Its actually good for society up to a point. Yet it would be better if we bought more of our own stuff to stretch those dollars into the corners of the system.). What we do know is that as we wean off the adrenaline rush of Federal stimulus we may want to figure out a way to hold onto what is helpful (i.e. increasing wages☝) while pouring cooling water on that which is not helpful (i.e. inflation and supply prices👇👇)
There is a discussion on how inflation can be fueled by supply chain issues or demand type issues. A way to solve that is to return production of some of the more important items back to the U.S.(especially leading technology that will be necessary to stay competitive) so that American manufacturers can avoid supply logistics, continue to raise wages, while also putting downward pressure on price through increased supply/demand not only in the U.S. but perhaps globally (i.e. meaning if we have a problem and can shoot two birds with one stone we should consider it.🥌 )
Its possible to impact the supply side (...and perhaps even shift demand with new products) but that would require the ability to influence the innovative process/systems that invents, develops, and manufacturers these products (i.e. those market areas/products where the U.S. would like to compete globally and are importing significant products means there may be some benefits of manufacturing separately. Its a little like changing the factors of the system by making the U.S. more competitive by adjusting industries to become active in key areas.)
What one would hope to have happen is downward pressure on inflation through increased supply chain, improved wages through labor development in higher reward occupations, while returning investment into American manufacturing that leads to sustained growth by creating new global markets (Delta County Invest Hedge Fund, Clusters and Semi Conductors, Michigan EV Investments Unfinished Economic Theory). That can only be possible if we are strategic about what type of clusters we develop and how to utilize new infrastructure changes to create competitive advantages and wider innovative butterfly effects (At least in theory. It would require commitment among investors and bureaucrats. Theories are just ideas that can be used to "test" one's environment. You can read Peter Eastwell's 'Understanding Hypotheses, Predictions, Laws, and Theories' 🤔. Also see Regional Development, China Trade Manufacture Imbalance, US New Platform.)
(Also you can read IMF's Professor Keynes Economic Theory. In general focused societal resources {i.e. money} can help increase economic activities {i.e. transactions} but through that increased economic activity and tax base we should be paying that money back to create "net positives". If lucky, "net surpluses" to spur economic activity in other areas. That is likely one reason why Professor Powell states our current debt trajectory is unsustainable if economy is not expanding faster than the servicing of debt. Perpetual systems are primarily driven by organic market factors because that is where the highest profits and innovation are realized in a way that improves an investor's bottom line. It can use a Keynesian-Schumpeter blend. One launches/attracts and the other builds...i.e. government-investor mutual benefits. 🤷 Maybe not. Its just an unvetted idea remember.)
You can gain a top line review of Powell's Testimony in Sergei Klebnikov's article'Stocks Surge After Powell Says Fed Not Afraid To Raise Rates Further If Higher Inflation Persists'
No comments:
Post a Comment