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Swamponomics: Interventionists Stall and Privileged Lefties Rage

The Federal Reserve, celebrity privilege, and NIMBYs everywhere.

Global financial markets are pleading with central banks to toss them a lifeline after this week’s devastating tsunami that wiped away $6 trillion. As the coronavirus worsens at an international level, investors fear the virus will significantly affect global supply chains, consumer spending, and business investment. While the People’s Bank of China (PBoC) has responded with monetary stimulus, other central banks appear to be waiting – including the Federal Reserve.

Fed Up!

Speaking in a recent interview with Bloomberg, St. Louis Fed Bank President James Bullard revealed that the Eccles Building would twiddle its thumbs until the data warrants a direct response from the central bank. Fed Chair Jerome Powell echoed this sentiment hours later, though he was a bit more open to some form of intervention – or perhaps traders were hoping that he was hinting at the possibility.

But is the Fed idling by and sitting on its hands? Not according to the latest M2 money supply data.

In January, before the coronavirus triggered global panic, money supply growth climbed 6.32% to a 36-month high. The last time the printing press churned out these many dollars was in February 2017 when the growth rate was 7.9%. The increased money supply is likely due to repo market bailouts that have been prevalent since September. Before repo madness, the growth rate had slumped to a 120-month low.

In February, we should get a better insight into how much the Fed is reacting to the coronavirus. Plus, with the repo liquidity injections seemingly winding down next month, as promised, we should see if money supply growth slows down, too. If so, it helps explain the 4,000-point crash.

Celebrity Privilege

Imagine being so privileged and selfish that you want to damage the economy because you hate the president. Well, that is what alleged thespian Patricia Arquette called for in a recent Instagram post:

“A REMINDER: Please contact everyone you know. On Monday, March 2nd, there is an Economic Shutdown. #Shutitdown. It’s easy.

DO NOT SPEND ANY MONEY ON ANYTHING ANYWHERE. our goal is to cause a $238.2 billion dollar blip on the federal government’s records.”

Indeed, the U.S. economy is two-thirds the consumer, so a dramatic slowdown in spending – even if it were for a day – would have lasting consequences. It would also come at a terrible time: the coronavirus having sent financial markets reeling over the last month. This call to arms is unlikely to be heeded by a significant number of Americans, though – you may be able to fit them inside Sen. Bernie Sanders’ (I-VT) “summer camper.”

That said, wokeness has escalated to another level: Wealthy leftist celebrities demanding the economy suffer because they disagree with who is occupying the White House. While the rich and famous of Hollywood could endure a financial crash, most Americans could not. Do these people ever perform any introspection? Doubtful.

NIMBYs Gonna NIMBY

Is there anything worse than a NIMBY except, perhaps, overbearing New York Yankees fans or people who pronounce the “h” in Whisky? The philosophy of “not in my backyard” is quite common in big cities, especially in left-leaning quarters. In all the major urban centers, progressives claim they want more homeless shelters, safe injection sites, and better public transit – just not anywhere near their multi-million-dollar bungalows. They fight against taller and denser construction, and they shriek to the heavens that market-rate housing structures would not lead to affordable housing (they want to maintain the status quo and ensure their valuations remain sky-high).

Understandably, the NIMBY crowd would argue against affordable housing. You only need to assess the data to know why they are handwringing.

According to The Wall Street Journal, Tokyo witnessed the creation of 145,000 new housing units in 2018, which is more than some of America’s biggest cities combined. Japan’s capital continues to be an attractive hotspot in the same vein as New York City or Los Angeles, but these new housing construction projects have kept rents relatively flat for a decade. Renting a two-bedroom in Tokyo, for example, costs about $1,000 per month, which has been the case for the last decade. Compare this to the $2,500 average in New York City or the $3,110 in San Francisco.

Do not be fooled into assuming the government is the one erecting new housing. The only thing Tokyo and other municipal governments have done is to reduce or scrap regulations that either prohibit or postpone new housing construction. The world’s third-largest economy has reformed zoning laws to facilitate broader and denser living arrangements and given private consultants the power to issue building permits. In large American and Canadian cities, you need to jump through loopholes and cozy up to politicians to build any new housing.

NIMBYs are the worst. Toronto is home to a housing crisis and a vast population of NIMBYs. In the last couple of years, here is what has happened among the left-leaning populace: Leaside railed against the building of a homeless shelter, the plans for new public transit perturbs Leslieville, homeowners in the downtown core keep whining about density, and a Hindu temple even shrieked about two condominium developments. These are all left-leaning pockets, too! The NIMBY mantra is a threat to both progress and the individual.

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Read more from Andrew Moran. 

Read More From Andrew Moran

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