In a Wall Street Journal front page story from last week, it was reported that the boom in Austin, TX continues. Tall buildings and fancy clubs sit where auto repair garages, head shops, and barbecue joints used to be located. Austin is brimming with talented people, and the logical corollary to the latter is that it’s also brimming with investors eager to be match their capital with the talented.
Reading this happy story of growth, it was hard not to hope that Journal Fed-watcher Nick Timiraos gave the article more than a glance. Maybe it opened his eyes? For now Timiraos writes on the supposition that economic growth is engineered by central bankers. Slow growth? No problem to Timiraos and the PhDs he reports on. They can just stimulate “financial markets and the economy by holding down long-term interest rates” through size purchases of longer-dated U.S.Treasuries. Timiraos gets it backwards. So do central bankers.
Read Full Article »
