I periodically explain that you generally don’t get a recession by hiking taxes, adding red tape, or increasing the burden of government spending. Those policies are misguided, to be sure, but they mostly erode the economy’s long-run potential growth.
If you want to assign blame for economic downturns, the first place to look is monetary policy.
When central banks use monetary policy to keep interest rates low (“Keynesian monetary policy,” but also known as “easy money” or “quantitative easing”), that can cause economy-wide distortions, particularly because capital gets misallocated.
And this often leads to a recession when this “malinvestment” gets liquidated.
By the way, doesn’t the other guest have amazing wisdom and insight?
But let’s not digress.
Back to the main topic…
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