Permanent distortion, p.34
Permanent Distortion, page 34
106. Powell, Jerome. “Transcript of Chair Powell’s Press Conference.” Federal Open Market Committee. Federal Reserve, June 10, 2020. Accessed December 10, 2021. www.federalreserve.gov/mediacenter/files/FOMCpresconf20200610.pdf.
107. Bernal, Rafael. “Bolsonaro’s Covid-19 Diagnosis Brings New Uncertainty to Brazil.” The Hill, July 7, 2020. Accessed December 10, 2021. thehill.com/latino/506284-bolsonaros-covid-19-diagnosis-brings-new-uncertainty-to-brazil.
108. Horton, Jake. “Covid: Why Has Peru Been So Badly Hit?” BBC News, June 1, 2021. Accessed December 10, 2021. www.bbc.com/news/world-latin-america-53150808.
109. BBC News. “Covid-19: Protests as Argentina’s Cases Pass 900,000.” October 13, 2020. Accessed December 10, 2021. www.bbc.com/news/world-latin-america-54522428.
110. McGeever, Jamie. “Update 2—Brazil Cuts Interest Rates to New Low, Leaves Door Open for ‘Residual’ Easing.” Reuters, June 17, 2020. Accessed December 10, 2021. www.reuters.com/article/brazil-economy-rates/update-2-brazil-cuts-interest-rates-to-new-low-leaves-door-open-for-residual-easing-idUSL1N2DU2O3.
111. Charner, Flora. “Brazil Tops 1 Million Covid-19 Cases. It May Pass the US Next, Becoming the Worst-Hit Country on the Planet.” CNN, June 19, 2020. Accessed December 10, 2021. https://edition.cnn.com/2020/06/19/americas/brazil-one-million-coronavirus-jair-bolsonaro-cases-intl/index.html.
112. Reuters Staff. “Mainland China Reports 19 New Coronavirus Cases, Including 13 in Beijing.” Reuters, June 24, 2020. Accessed December 10, 2021. www.reuters.com/article/uk-health-coronavirus-china-cases-idUKKBN23W02L.
113. Bloomberg News. “China Signals Further Reserve Ratio Cut to Spur Bank Lending.” Bloomberg, June 17, 2020. Accessed December 10, 2021. www.bloomberg.com/news/articles/2020-06-18/china-signals-further-reserve-ratio-cuts-to-spur-bank-lending.
114. Zhou, Winni, and Andrew Galbraith. “China Pledges Continued Economic Support but Warns of Liquidity Hangover.” Reuters, June 17, 2020. Accessed December 10, 2021. www.reuters.com/article/us-china-pboc-governor/china-pledges-continued-economic-support-but-warns-of-liquidity-hangover-idUSKBN23P0DZ.
115. “Hawkish Fed, Dovish PBOC Diverge in New Phase of Policy.” Bloomberg News, December 19, 2021. Accessed January 19, 2022. www.bloombergquint.com/global-economics/hawkish-fed-dovish-pboc-diverge-in-new-phase-of-pandemic-policy.
116. Pelley, Scott. “Full Transcript: Fed Chair Jerome Powell’s 60 Minutes Interview on Economic Recovery from the Coronavirus Pandemic.” CBS News, March 17, 2020. Accessed December 10, 2021. www.cbsnews.com/news/full-transcript-fed-chair-jerome-powell-60-minutes-interview-economic-recovery-from-coronavirus-pandemic.
117. Federal Reserve. “Federal Reserve Statistical Release H.4.1: Factors Affecting Reserve Balances.” January 7, 2016. Accessed December 10, 2021. www.federal reserve.gov/releases/h41/20160107.
118. Nominal GDP is not adjusted for inflation; in practice, during times of low inflation, nominal and regular GDP are similar. Silver, Caleb. “The Top 25 Economies in the World.” Investopedia, December 24, 2020. Accessed December 10, 2021. www.investopedia.com/insights/worlds-top-economies/#5-india.
119. Portes, Ronamil, and Tayyeba Irum. “Billion-Dollar Bankruptcies Hit Record in 2020 as Covid-19 Takes Toll.” S&P Global, January 25, 2021. Accessed December 10, 2021. www.spglobal.com/marketintelligence/en/news-insights/latest-news-headlines/billion-dollar-bankruptcies-hit-record-in-2020-as-covid-19-takes-toll-62267412.
120. Hulbert, Mark. “Opinion: The Dow Has Completely Recovered Its 2020 Bear-Market Loss. Here’s What Comes Next.” MarketWatch, November 21, 2020. Accessed December 10, 2021. www.marketwatch.com/story/the-dow-has-completely-recovered-its-2020-bear-market-loss-heres-what-comes-next-2020-11-20.
121. Mutlu, Belgin Yakisan. “Central Banks Cut Interest Rates 207 Times in 2020.” Anadolu Agency, January 18, 2021. Accessed December 10, 2021. www.aa.com.tr/en/economy/central-banks-cut-interest-rates-207-times-in-2020/2113971.
Chapter 6: “Whatever It Takes” Money
1. Pelley, Scott. “Federal Reserve Chairman Jerome Powell on the Coronavirus-Ravaged Economy.” CBS News, May 18, 2020. Accessed December 13, 2021. www.cbsnews.com/news/coronavirus-economy-jerome-powell-federal-reserve-chairman-60-minutes. Miller, Rich. “Jerome Powell Sees Long Road Ahead for Jobs Market.” BNN Bloomberg, June 11, 2020. Accessed December 13, 2021. www.bnn bloomberg.ca/jerome-powell-sees-long-road-ahead-for-jobs-market-1.1448833.
2. The phrase “shot heard round the world” refers to the first shot of the battles of Lexington and Concord on April 19, 1775, that started the American Revolutionary War, which led to the creation of the United States of America.
3. Draghi, Mario. “Verbatim of the Remarks Made by Mario Draghi.” European Central Bank, July 26, 2012. Accessed December 13, 2021. www.ecb.europa.eu/press/key/date/2012/html/sp120726.en.html. European Central Bank. “New President of the European Central Bank.” November 1, 2019. Accessed December 13, 2021. www.ecb.europa.eu/press/pr/date/2019/html/ecb.pr191101~8f1889db97.en.html.
4. Castro, Rúben. “ECB Will Continue Doing Whatever Is Necessary to Deliver on Mandate, Lagarde Says.” EURACTIV, May 8, 2020. Accessed December 13, 2021. www.euractiv.com/section/economy-jobs/news/ecb-will-continue-doing-whatever-is-necessary-to-deliver-on-mandate-lagarde-says.
5. Vlastelica, Ryan. “What’s Driving Wall Street’s Apple Optimism? Almost Everything.” Bloomberg, June 23, 2020. Accessed December 13, 2021. www.bloomberg.com/news/articles/2020-06-23/what-s-driving-wall-street-s-apple-optimism-almost-everything.
6. Sen, Conor. “Your Net Worth Is America’s Secret Economic Weapon.” Washington Post, August 21, 2020. Accessed December 13, 2021. www.washingtonpost.com/business/on-small-business/your-net-worth-is-americas-secret-economic-weapon/2020/08/20/70df5b92-e2d4-11ea-82d8-5e55d47e90ca_story.html.
7. Adrian, Tobias, and Fabio Natalucci. “Financial Conditions Have Eased, but Insolvencies Loom Large.” IMF Blog, June 25, 2020. Accessed December 13, 2021. https://blogs.imf.org/2020/06/25/financial-conditions-have-eased-but-insolvencies-loom-large.
8. Pozen, Robert C. “Donald Trump’s Tax Plan Could Land America $10 Trillion Deeper in Debt.” Brookings, March 7, 2016. Accessed December 13, 2021. www.brookings.edu/opinions/donald-trumps-tax-plan-could-land-america-10-trillion-deeper-in-debt.
9. Yardeni, Edward, and Mali Quintana. “Central Banks: Monthly Balance Sheets.” Figure 6. Yardeni Research, Inc. Accessed January 14, 2022. www.yardeni.com/pub/peacockfedecbassets.pdf.
10. Goldman, David. “European Central Bank Throws 750 Billion Euros at the Economy to Fight the Coronavirus Crash.” CNN, March 18, 2020. Accessed December 13, 2021. www.cnn.com/2020/03/18/economy/ecb-bailout/index.html. Kihara, Leika, and Tetsushi Kajimoto. “Bank of Japan Expands Stimulus as Pandemic Pain Worsens.” Reuters, April 26, 2020. Accessed December 13, 2021. www.reuters.com/article/us-japan-economy-boj/bank-of-japan-expands-stimulus-as-pandemic-pain-worsens-idUSKCN22902K. Bank of England. “Bank of England Measures to Respond to the Economic Shock from Covid-19.” March 11, 2020. Accessed December 13, 2021. www.bankofengland.co.uk/news/2020/march/boe-measures-to-respond-to-the-economic-shock-from-covid-19. Reuters Staff. “China Takes Major Steps to Prop up Coronavirus-Hit Economy.” Reuters, February 20, 2020. Accessed December 13, 2021. www.reuters.com/article/us-china-health-policy-factbox/china-takes-major-steps-to-prop-up-coronavirus-hit-economy-idUSKBN20E101.
11. Wiseman, Paul, and Marcy Gordon. “America’s Very Wealthiest Likely Pay Less in Taxes than You Do, ProPublica Finds.” Seattle Times, June 8, 2021. Accessed December 13, 2021. www.seattletimes.com/business/propublica-many-of-the-uber-rich-pay-next-to-no-income-tax.
12. Gardner, Matthew, and Steve Wamhoff. “55 Corporations Paid $0 in Federal Taxes on 2020 Profits.” Institute on Taxation and Economic Policy, April 2, 2021. Accessed December 13, 2021. https://itep.org/55-profitable-corporations-zero-corporate-tax.
13. D’Souza, Deborah. “Modern Monetary Theory (MMT) Definition.” Investopedia, February 23, 2021. Accessed December 13, 2021. www.investopedia.com/modern-monetary-theory-mmt-4588060.
14. Greifeld, Robert. “Op-Ed: Pandemic Moves Modern Monetary Theory from the Fringes to Actual US Policy.” CNBC, April 29, 2020. Accessed December 13, 2021. www.cnbc.com/2020/04/29/op-ed-pandemic-moves-modern-monetary-theory-from-the-fringes-to-actual-us-policy.html.
15. Lowrey, Annie. “Warren Mosler, a Deficit Lover with a Following.” New York Times, July 4, 2013. Accessed December 13, 2021. www.nytimes.com/2013/07/05/business/economy/warren-mosler-a-deficit-lover-with-a-following.html.
16. Greifeld, Robert. “Op-Ed: Pandemic Moves Modern Monetary Theory from the Fringes to Actual US Policy.” CNBC, April 29, 2020. Accessed December 13, 2021. www.cnbc.com/2020/04/29/op-ed-pandemic-moves-modern-monetary-theory-from-the-fringes-to-actual-us-policy.html.
17. Kelton, Stephanie. The Deficit Myth: Modern Monetary Theory and the Birth of the People’s Economy. New York: Public Affairs, 2021, page 234.
18. Elder, Bryce, Adam Samson, Joshua Oliver, and Hudson Lockett. “Wall Street Stocks Seal Best Quarter Since 1998.” Financial Times, June 30, 2020. Accessed December 13, 2021. www.ft.com/content/6d09858e-6dc8-4e74-bbcb-9f837e4aa7c8.
19. Horowitz, Julia. “Inequality in America Was Huge Before the Pandemic. The Stock Market Is Making It Worse.” CNN, June 17, 2020. Accessed December 13, 2021. https://edition.cnn.com/2020/06/17/investing/stock-market-inequality-corona virus/index.html.
20. MSCI stands for Morgan Stanley Capital International. Theirs are commonly used indices that reflect the stock price action of major markets and regions across the world.
21. Warrick, Ambar. “Emerging Markets-Stocks Set for Best Quarter in Nearly 11 Years; Currencies Muted.” Yahoo! Money, June 30, 2020. Accessed December 13, 2021. https://money.yahoo.com/emerging-markets-stocks-set-best-091404817.html.
22. Tan, Huileng. “Taiwan’s Economy Has Held up ‘Extremely Well’ Despite the Coronavirus, Says Economist.” CNBC, June 29, 2020. Accessed December 13, 2021. www.cnbc.com/2020/06/29/taiwans-economy-has-held-up-extremely-well-despite-the-coronavirus.html.
23. Lee, Yen Nee. “This Is Asia’s Top-Performing Economy in the Covid Pandemic—It’s Not China.” CNBC, January 28, 2021. Accessed December 13, 2021. www.cnbc.com/2021/01/28/vietnam-is-asias-top-performing-economy-in-2020-amid-covid-pandemic.html.
24. Alfano, V., and S. Ercolano. “The Efficacy of Lockdown Against COVID-19: A Cross-Country Panel Analysis.” Applied Health Economics and Health Policy 18 (2020): 509–517. doi.org/10.1007/s40258-020-00596-3.
25. Stiglitz, Joseph E. “Op-Ed: Joseph Stiglitz Explains Why the Fed Shouldn’t Raise Interest Rates.” Los Angeles Times, August 27, 2015. Accessed December 13, 2021. www.latimes.com/opinion/op-ed/la-oe-0827-stiglitz-interest-rates-20150827-story.html.
26. Zarroli, Jim. “It’s Nice to Be Rich: Wall Street Is Raking In Profits in the Stock Market.” NPR, July 15, 2020. Accessed December 13, 2021. www.npr.org/sections/coronavirus-live-updates/2020/07/15/891318651/its-nice-to-be-rich-big-banks-are-raking-in-profits-in-the-stock-market.
27. Dudley, Bill. “A $10 Trillion Fed Balance Sheet Is Coming.” BNN Bloomberg, June 22, 2020. Accessed December 13, 2021. www.bnnbloomberg.ca/a-10-trillion-fed-balance-sheet-is-coming-1.1454178.
28. Bosley, Catherine. “Government Debts May Hold Monetary Policy Hostage, BIS Warns.” Bloomberg, June 30, 2020. Accessed December 13, 2021. www.bloomberg.com/news/articles/2020-06-30/indebted-governments-may-hold-monetary-policy-hostage-bis-warns.
29. Curran, Enda, and Chris Anstey. “Pandemic-Era Central Banking Is Creating Bubbles Everywhere.” Bloomberg, January 24, 2021. Accessed March 5, 2022. www.bloomberg.com/news/features/2021-01-24/central-banks-are-creating-bubbles-everywhere-in-the-pandemic.
30. Reuters Staff. “U.S. Records over 25,000 Coronavirus Deaths in July” Reuters, July 31, 2020. Accessed December 24, 2021. www.reuters.com/article/us-health-coronavirus-usa-july/u-s-records-over-25000-coronavirus-deaths-in-july-idUSKCN24W1G1.
31. New York Times. “See Reopening Plans and Mask Mandates for All 50 States.” July 1, 2021. Accessed December 13, 2021. www.nytimes.com/interactive/2020/us/states-reopen-map-coronavirus.html.
32. BBC News. “Coronavirus: US Economy Sees Sharpest Contraction in Decades.” July 30, 2020. Accessed December 13, 2021. www.bbc.com/news/business-53574953.
33. Wiltermuth, Joy, and Sunny Oh. “U.S. Stocks End Higher After Fed Keeps Interest Rates Near Zero, Powell Vows to Keep up Support During Pandemic.” MarketWatch, July 29, 2020. Accessed December 13, 2021. www.marketwatch.com/story/stock-index-futures-edge-higher-as-investors-await-fed-decision-wade-through-earnings-flood-2020-07-29.
34. Smith, Alexander, and Eric Baculinao. “Chinese Foreign Minister Says U.S. Ties Worst Since 1979, Calls for ‘Peaceful Coexistence.’” NBC News, July 9, 2020. Accessed December 13, 2021. www.nbcnews.com/news/world/chinese-foreign-minister-says-u-s-ties-worst-1979-calls-n1233281.
35. Frayer, Janis Mackey, and Yuliya Talmazan. “China Closes U.S. Consulate in Chengdu in Tit-for-Tat with Washington.” NBC News, July 27, 2020. Accessed December 13, 2021. www.nbcnews.com/news/world/u-s-closes-consulate-chengdu-china-after-houston-order-n1234951.
36. McGeever, Jamie. “Brazil Economy Could Fall 7%, Deficit Top 11% of GDP, Treasury Secretary Says.” Reuters, June 24, 2020. Accessed December 13, 2021. www.reuters.com/article/us-brazil-economy-deficit-idUSKBN23V2GF.
37. Taylor, Derrick Bryson. “A Timeline of the Coronavirus Pandemic.” New York Times, March 17, 2021. Accessed January 18, 2022. www.nytimes.com/article/coronavirus-timeline.html.
38. BBC News. “India Coronavirus: Why Is India Reopening amid a Spike in Cases?” May 31, 2020. Accessed December 13, 2021. www.bbc.com/news/world-asia-india-52808113.
39. Beck, Martha Viotti, and Simone Preissler Iglesias. “Bolsonaro’s Social Spending Defies Austerity Drive in Brazil.” Bloomberg, August 14, 2020. Accessed December 13, 2021. www.bloomberg.com/news/articles/2020-08-14/bolsonaro-s-new-social-program-defies-austerity-drive-in-brazil.
40. Associated Press. “California Faces a Staggering $54 Billion Budget Deficit Due to Economic Devastation from Coronavirus.” CNBC, May 7, 2020. Accessed December 13, 2021. www.cnbc.com/2020/05/07/california-faces-a-staggering-54-billion-budget-deficit-due-to-economic-devastation-from-coronavirus.html.
41. Siripurapu, Anshu, and Jonathan Masters. “How Covid-19 Is Harming State and City Budgets.” Council on Foreign Relations, March 19, 2021. Accessed December 13, 2021. www.cfr.org/backgrounder/how-covid-19-harming-state-and-city-budgets.
42. Evans, Pat. “16 Mind-Blowing Facts About California’s Economy.” Business Insider, April 26, 2019. Accessed December 13, 2021. https://markets.business insider.com/news/stocks/california-economy-16-mind-blowing-facts-2019-4.
43. Associated Press. “Gov. Newsom Signs Budget Closing $54.3 Billion Deficit with Tax Raises, School Funding Delay and Cuts to Services.” KTLA, June 29, 2020. Accessed December 13, 2021. https://ktla.com/news/california/gov-newsom-signs-budget-closing-54-3-billion-deficit-with-tax-raises-school-funding-delay-and-cuts-to-services.
44. McGreevy, Patrick. “California’s Unemployment Agency Targeted for Audit as Criticism Grows.” Los Angeles Times, June 26, 2020. Accessed December 13, 2021. www.latimes.com/california/story/2020-06-26/california-unemployment-agency-audit-criticism-edd.
45. Congress. “Oversight of the Treasury Department’s and the Federal Reserve’s Pandemic Response.” U.S. Government Publishing Office, June 6, 2020. Accessed March 5, 2022. www.congress.gov/event/116th-congress/house-event/LC65881/text ?s=3&r=2.
46. Goodman, Peter S., Patricia Cohen, and Rachel Chaundler. “European Workers Draw Paychecks. American Workers Scrounge for Food.” New York Times, July 3, 2020. Accessed December 13, 2021. www.nytimes.com/2020/07/03/business/econ omy/europe-us-jobless-coronavirus.html.
47. Powell, Jerome H. “Testimony by Chair Powell on the Coronavirus and CARES Act.” Federal Reserve System Board, June 30, 2020. Accessed December 13, 2021. www.federalreserve.gov/newsevents/testimony/powell20200630a.htm.
48. Lang, Hannah. “Cheat Sheet: 8 Ways Fed Is Using Emergency Powers to Counter Pandemic.” American Banker, May 4, 2020. Accessed December 13, 2021. www.americanbanker.com/list/cheat-sheet-8-ways-fed-is-using-emergency-powers-to-counter-pandemic.
49. Powell, Jerome. “Transcript of Chair Powell’s Press Conference.” Federal Open Market Committee. Federal Reserve, June 10, 2020. Accessed December 13, 2021. www.federalreserve.gov/mediacenter/files/FOMCpresconf20200610.pdf.
50. Timiraos, Nick. “Automakers, Technology Firms Are Largest Components of Fed’s Corporate-Bond Purchases.” Wall Street Journal, June 28, 2020. Accessed December 13, 2021. www.wsj.com/articles/automakers-technology-firms-are-largest-components-of-feds-corporate-bond-purchases-11593376778.
51. Smith, Molly, and Jeremy Hill. “A $1 Trillion Fed-Fueled Borrowing Bonanza for the Creditworthy.” Bloomberg, June 4, 2020. Accessed December 13, 2021. www.bloomberg.com/news/articles/2020-06-04/it-s-borrow-or-bust-for-companies-in-the-coronavirus-pandemic?sref=mrm8kJge.
52. Lim, Dawn. “BlackRock Closes in on the Once Unthinkable, $10 Trillion in Assets.” Wall Street Journal, July 14, 2021. Accessed January 12, 2022. www.wsj.com/articles/blackrock-now-has-close-to-10-trillion-under-management-11626259550.
53. Reuters. “Blackrock Conflicts Managed ‘Extremely Carefully,’ Fed’s Powell Says.” Thomson Reuters, July 29, 2020. Accessed January 12, 2022. www.reuters.com/article/us-usa-fed-blackrock-idUSKCN24U377.
54. Riquier, Andrea. “The Fed Has Bought $8.7 Billion Worth of ETFs. Here Are the Details.” MarketWatch, September 21, 2020. Accessed January 12, 2022. www.market watch.com/story/the-fed-has-been-buying-etfs-what-does-it-mean-11600704182.
55. Goldstein, Matthew. “Fed Releases Details of BlackRock Deal for Virus Response.” New York Times. March 27, 2020. www.nytimes.com/2020/03/27/business/coronavirus-blackrock-federal-reserve.html.
56. Martens, Pam, and Russ Martens. “Fed Chair Powell Had 4 Private Phone Calls with BlackRock’s CEO Since March as BlackRock Manages Upwards of $25 Million of Powell’s Personal Money and Lands 3 No-Bid Deals with the Fed.” Wall Street on Parade, August 7, 2020. Accessed January 12, 2022. wallstreetonparade.com/2020/08/fed-chair-powell-had-4-private-phone-calls-with-blackrocks-ceo-since-march-as-blackrock-manages-upwards-of-25-million-of-powells-personal-money-and-lands-3-no-bid-deals-with-the-fed.
