Economics

Rubs me the wrong way as well.

One issue is that every time US does QE, institutional investors try convert their dollars into US assets. They cannot resist. They buy property and its value rises way more than inflation figures. This serves the property sector but little else in the economy.

Setting up an infrastructure bank will supposedly prevent this but US is not set up to effectively spend money on infrastructure. They are set up to WASTE money because they have a very short term outlook on infrastructure investment.

From the article

Rather than trying to kneecap our competitors with sanctions and tariffs, we can grow our way to prosperity by turning on the engines of production.

Why do that through QE ?

If the US wants money for infrastructure, take property assets from the rich and sell it to the poor 🤑. If regular people are broke, the economy is broke. Housing is one of their biggest bills. Once regular people have cheap housing, they can spend more of their income in the local economy.

That demand will stimulate growing the local production which you do protect to a limited degree but keep them competitive with the rest of the world.

Isn't that a China strategy as well? The article kinda ignores that.

I thought it was a good illustration of the fact that issuance of currency itself isn't what drives inflation. The question is of how that money is allocated. China issues currency for socially useful ventures such as building infrastructure, expanding industry, etc. Meanwhile, the US issues currency for stuff like bailing out financial capitalists. I'd argue what this highlights is that money should really be seen as an allocation mechanism. When a government issues currency, it directs labor and resources in a particular direction.

This is true, but on the bright side, there is virtually zero chance of the US being able to implement the kind of China-inspired strategy that the author of this article advocates. For one thing it would take going against the power of the financial oligarchy. It would take going against the neo-liberal way of thinking that has become ingrained in the American government from top to bottom, not to mention the donor class would not allow it, as a strategy focused on long term growth over short term predatory practices threatens their immediate profits.

The US does not, at least to me, appear capable of changing course even as many see the disaster they are barrelling towards if things continue the way they are. And Trump's reckless policies will only accelerate things.