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Good analysis, but things are so hard to predict, because most analysis is done assuming at least a semi-rational and responsible government.
Which we no longer have.
For example, who could have predicted that the massive over-reaction, lockdowns, shutdown of almost the entire economy in the face of a virus that had almost no health effect on 75-90% of the population would cause a giant economic “boom.” (In quotes because it was of course a fake boom, the “gains” are rapidly evaporating, leaving us holding non empty bag of inflation and instability).
Where you’d expect everyone to responsibly share in some collective economic pain in the face of a negative event, the Govt (on a bipartisan consensus) instead threw the biggest party/orgy in the history of the world.
We now have a govt that acts as a guarantor of everything (esp if the negative consequence can be shown to affect certain groups in any way).
So, unemployment goes up? That’s a crisis! Need another Inflation “Reduction” Act to print and distribute a few hundred billion more.
People can’t pay mortgages? Crisis! Make others pay for it.
People don’t want to work or pay rent? Crisis! Let and encourage them to steal it.
So living in a world where any crisis” can be manufactured or exploited, it’s very difficult to predict what the Govt is going to do, and it has a huge effect on the economic system. Living in a world that no longer seems to recognize or value objective reality (e.g. having the cojones to call a clearly pro-inflationary law an “Inflation Reduction Act,” or calling clearly dangerous and persistent inflation “transitory”) also leads to much instability and unpredictability.
The bottom line is it seems that “normal” economic analysis isn’t good enough anymore, it feels like it needs to also at least try to reflect some of the insanities of the world we now live in.
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