Reprint Of My 2018 Blog Post About Central Bankers And Central Planners Missing And Creating Crises

 

Reprint of my 2018 blog post about central bankers and central planners missing crises.

Sunday, November 18, 2018

My WSJ Published Comment To "Why Central Bankers Missed the Crisis"

Posted By Milton Recht

My Wall Street Journal published comment to "Why Central Bankers Missed the Crisis: The lesson of 2008, a top economist says, is that monetary maestros don’t pay enough attention to financial markets. Are they making the same mistake again?" by Joseph C. Sternberg:

We have seen that central planning of the production side of the economy does not work and leads to misallocation of resources and shortages. Why should central planning of the monetary side of the economy work any better? The Great Recession began in Dec 2007. M1, ready accessible cash held by banks, was flat for several years prior and velocity and private debt were increasing. Stock market indices started their decline in Oct 2007. Without available cash, banking and economy wide leverage increased. The unnoticed recession lowered home prices which prevented Bear Stearns from rolling over short term debt collateralized by housing. From then on, government interference created a crisis. The Fed needs more wisdom of the crowd, market source info, like TIPS, but related to future GDP. Markets beat models.

Addendum:

The Wall Street Journal 2018 article [Weblink updated] mentioned above is worth reading.

US Obesity Is Caused By Our Economic Success and Not Other Factors

Reposting of my almost 13 year old post that obesity is a result of our economic success and not caused by other factors.

Friday, April 13, 2012

Obesity Is A Result Of Our Economic Success And Not A Product Of Food Advertising, Larger Portions Or Lack Of Exercise

Posted By Milton Recht

My comment to The Wall Street Journal article, "SpongeBob SquarePants' Last Stand: Restricting TV ads for food aimed at kids won't help cure the child obesity problem." by Todd Zywicki:

The March 2012, Bureau of Labor Statistics issue of "Focus on Prices and Spending" has data showing that food (including restaurants) is much cheaper in the US than in other countries, A typical US household spends a much smaller percentage (14%) of its income on food (including restaurants) than families in other countries. The US income percentage spent on food has also been declining since the 1950s, if not earlier. [Weblink added.]

In home refrigeration, longer lasting foods, well stocked, convenient grocery stores and restaurants for any budget insure that most families have round the clock access to an ample supply, if not an overabundance, of affordable food.

Despite beliefs that we need to increase exercise to control obesity; studies show that while exercise is good for health, it does not produce weight loss. Despite demands for caloric labeling and smaller portions in restaurants, numerous nutritional studies show that people tend to eat a fixed number of calories per day and make up earlier reductions in calories and food intake at later meals or snacks.

Economic studies have shown that a 1% decrease in food prices leads to a 0.6% increase in food consumption.

Advertising, lazy kids, neglectful parents and corporate America are not the cause of the US obesity problem. Obesity is in fact becoming an international problem as the standard of living increases and the percentage of income spent on food declines in other countries. Our success in raising our standard of living and our avoidance of famines is causing our 20,000 year old designed bodies to get fat.

Yes, obesity is unhealthy, but there are no bad people, bad companies or easy fixes for our waistline problem.

Food is cheap and plentiful and our bodies are not designed to be lean when there is a constant available abundance of food.