This is a first of a series in which I will investigate the role that economics plays in distorting our perception of reality. The coronavirus pandemic has exposed the bankruptcy of social thought. As the crisis gathered pace in the United States towards the end of March 2020, in an unprecedented show of bipartisan unity, Congress passed a $2 trillion economic stabilization package. The Fed, responding to the escalating market volatility, had moved even earlier by cutting the policy rate down to zero, purchasing hundreds of billions of dollars in Treasuries and mortgage-backed securities, and extending credit to nonbanks. Other hard currency-issuing central banks were not far behind. The European central bank announced a 750-billion-euro bond buying program. The Bank of Japan, the pioneer of ‘yield curve control,’ signaled its intention to double its asset purchases. The Bank of England lowered its benchmark rate to 0.5 percent, the lowest in history. Downing Street let it be known that it was preparing an economic support package “unprecedented in the history of the British state.” Tokyo made similar gestures. Germany unveiled a 350-billion-euro stimulus package. Perhaps responding to the country’s reputation for Swabian tight-fistedness, Chancellor Angela Merkel made it clear that “we won’t be asking everyday what it means for our deficit.” The IMF set aside $50 billion to lend to countries facing financial crisis, while the World Bank said it would provide $12 billion in financing to developing nations hit hard by the pandemic.
Economics as Ideology (1): Introduction
Economics as Ideology (1): Introduction
Economics as Ideology (1): Introduction
This is a first of a series in which I will investigate the role that economics plays in distorting our perception of reality. The coronavirus pandemic has exposed the bankruptcy of social thought. As the crisis gathered pace in the United States towards the end of March 2020, in an unprecedented show of bipartisan unity, Congress passed a $2 trillion economic stabilization package. The Fed, responding to the escalating market volatility, had moved even earlier by cutting the policy rate down to zero, purchasing hundreds of billions of dollars in Treasuries and mortgage-backed securities, and extending credit to nonbanks. Other hard currency-issuing central banks were not far behind. The European central bank announced a 750-billion-euro bond buying program. The Bank of Japan, the pioneer of ‘yield curve control,’ signaled its intention to double its asset purchases. The Bank of England lowered its benchmark rate to 0.5 percent, the lowest in history. Downing Street let it be known that it was preparing an economic support package “unprecedented in the history of the British state.” Tokyo made similar gestures. Germany unveiled a 350-billion-euro stimulus package. Perhaps responding to the country’s reputation for Swabian tight-fistedness, Chancellor Angela Merkel made it clear that “we won’t be asking everyday what it means for our deficit.” The IMF set aside $50 billion to lend to countries facing financial crisis, while the World Bank said it would provide $12 billion in financing to developing nations hit hard by the pandemic.