top of page

Mazzei Minute: 01/06/23

It didn’t have to be this way! An economy slipping into recession, staggering inflation and a bear market cast a pall over the start of 2023.

In 2022, President Biden pushed for and approved $5 trillion of unnecessary spending. Jerome Powell, Chairman of the Federal Reserve, fell under the spell of the foolish modern monetary theory crowd and pumped another $4.7 trillion into an already rebounding economy.

They both ignored obvious signs of rising inflation from our commodity markets in 2021 and perpetuated a fiasco by claiming inflation would be “transitory.” History will judge both the lockdowns and the tidal wave of cash as major overreactions that caused more harm than good.

The main failure of the Biden-Powell team is the lack of recognition that the American people, the economy and the markets are extremely resilient and can respond quickly to changes. Granted, some modest measures to support the financial system are always important, but D.C. academics and bureaucrats need to understand that in the digital era, money and resources adapt quickly to major shifts or shocks.

Since “listening” to the markets and real-time data often astutely informs what the economy and markets need, policy blunders can be avoided. Yet Powell is ignoring the latest data in my opinion to firmly reestablish his credibility to bring inflation back under control. After dousing the economy with a historic increase in rates from 0% to 4.5%, the consensus estimates for growth this year are a measly 0.5%.

If these massive policy mistakes had been avoided, the economy would likely be growing, inflation would be low, and the stock market would be going up. Let's hope the D.C. technocrats learn their lesson and get out of the way of the hard-working and innovative American people.


bottom of page