Above title is interpretive opinion and not a statement by CNBC or RP.
Ron Paul: Fed cuts and China tariffs give socialists credibility for ‘first time in my lifetime’
Published Fri, Oct 11 2019
Jessica Bursztynsky
Libertarian Ron Paul, a longtime critic of the Federal Reserve and U.S. meddling overseas, describes central bank interest rate cuts and President Donald Trump’s China tariffs as interventionist moves “far removed from capitalism.”
“It’s a real incentive for the socialists to chime in — and for the first time in my lifetime, socialists sort of have ‘credibility,’” the former GOP Texas congressman and three-time presidential candidate told CNBC on Friday.
Known for his economic and stock market bubble warnings, Paul, 84, said on “Squawk Box” the Fed is “doing too much” in the way of easing monetary policy. “It is central economic planning, mainly through manipulation of money and credit.”
The market expects at least one more Fed rate cut before the end of the year. Fed policymakers reduced borrowing costs for the first time in more than a decade after their July meeting. They cut again last month.
Fed Chairman Jerome Powell — bashed constantly by Trump for not doing enough to easy monetary policy — said on Tuesday the central bank will start expanding its balance sheet again “soon.”
“In no sense is this QE,” Powell said in a Q&A session after his speech. QE refers to quantitative easing, a bond-buying measure it launched following the 2008 financial crisis. The Fed embarked on several QE programs during and after the crisis.
Fed critics, like Paul, think the Fed stayed in post-crisis mode for too long, artificially inflating asset prices and making investors take on too much risk to get returns.
“Then we get into manipulating trade,” Paul said, referring to the import tariffs Trump imposed on China that started the 15-month-long trade war between the two nations.
“We’re so far removed from capitalism,” the former congressman said. “Yet we get blamed,” he added. “Socialists come in and say, ‘See what you guys did to our economy.’”
To find balance in the markets, Paul said the U.S. needs to cut spending, get rid of the federal deficit and stop the Fed from “pretending they can do economic planning.”
“Unfortunately, that’s not going to happen,” Paul added. “I believe we’re going to see a collapse that will force us to reassess the monetary policy, and that will be very disruptive.”
https://www.cnbc.com/2019/10/11/ron-...edibility.html
Related
Lincoln and Trump: Two of a Kind?
Trump and Lincoln are soulmates on today’s most contentious economic issue
07/03/2019 James Bovard
President Trump has outraged legions of political opponents with his plan to give a Fourth of July speech on the steps of the Lincoln Memorial.
Trump and Lincoln are soulmates on today’s most contentious economic issue. Trump portrays imports as a pox while his trade wars are ravaging American farmers and many manufacturers. Promising high tariffs helped Lincoln capture the presidency in 1860 and he cheered in February 1861 when congressional Republicans boosted tariffs as high as 216%. The New York Times denounced that bill as a “disastrous measure” that “alienates extensive sections of the country we seek to retain” and will “deal a deadly blow … at the measures now in progress to heal our political differences.” That tariff law helped drive Virginia, North Carolina, and Tennessee out of the Union, thereby making the Civil War far more destructive. Protectionism remains as idiotic now as it was 150 years ago but politicians continue to demagogue the issue.
https://mises.org/wire/lincoln-and-trump-two-kind
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Originally Posted by enhanced_deficit
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