He wants more of the first two and less of the third.
He seems conflicted until one knows the background discussion on NGDP targets. Great idea, NGDP targeting, but how? The answer is the first sentence. It is a default code word, by elimination. In the background discussion, all other combinations have been rejected.
Powell wants to transfer, back to Treasury, sufficient double spending power to get that first sentence. He needs a partition between intelligent government devaluation and day to day banking. It is hard not to draw that conclusion.
If the central bank is not the tax collector of last resort, who it? That is for the Supremes, it is between legislated taxes vs banking fees. It is not a bank issue, getting the central bank involved, directly, is a sure path to sudden default. If the Senate and New Fed and Treasury agree, that seems enough under the coinage power. The mechanism is not the issue, Treasury's only option in the coinage power is to erase or create digits within a known double spending power.
The issue can be reduced to that power. How will the Supremes decide when that is too much power relative to taxes? I have an idea, first leave the banks out of that debate entirely, second, bribe the senate, the house can use cash transfers to set that coinage power. The house can tantalize revenue sharing, cash to the state capitals and get the senate votes, always. If the bank deal and the revenue sharing deal were somehow coupled, then in the Supremes is it obvious, both powers were adjudicated within the legislature, conflict resolved.
To decode, think that they have Post Nixon Shock syndrome, really. That explains the almost hysterical denial. Now they got Black Swanned, like the rest of us.
No comments:
Post a Comment