Who is the most productive 3-point NBA shooter over the last two years? The nature of the question should quickly reveal it as a trick one of sorts. In other words, the answer isn’t Steph Curry. But the answer is one of Curry’s teammates, Jordan Poole.
According to the Wall Street Journal’s Ben Cohen, Poole “struggled as a rookie two years ago.” And his pay reflected his struggles. Cohen reports that two years ago Poole “was a backup making less money than 300 people in the league,” but now “he might be the player who swings this NBA season,” including returning the Golden State Warriors to championship glory.
Poole is hot, to say the least. Maybe this is a sign that the NBA should suspend him, that an enforcer on another team should foul him in excessive fashion, or perhaps Warriors coach Steve Kerr should simply bench him lest he get too hot. It all sounds ridiculous, and it does because it is ridiculous.
That’s of course true unless you’re talking economic policy. When it comes to economics and the high IQ types who populate the profession, what’s ridiculous is the faux science’s daily bread. After all, the consensus inside the profession remains that the maiming, killing and wealth destruction that was World War II is what lifted the U.S. economy out of the Great Depression. It would be hard to find a more absurd – and horrifying – thought than the previous one, but economists certainly try to.
One notion that’s fully captured economists in modern times is the patently absurd view that the U.S. economy can become “too hot,” and since it can, it’s up to the PhDs at the Federal Reserve to bring what’s too hot in for a “soft landing.” It’s like NBA commissioner Adam Silver ordering an opposing player to flagrantly foul Poole out of the playoffs.
To which some will say the NBA is different. These are players, after all. The whole point is constant improvement. Precisely.
Which brings us to a front page Wall Street Journal story from last week authored by Jon Hilsenrath and Nick Timiraos. The duo devoted copious amounts of ink to whether or not Fed Chairman Jerome Powell and the central bank he oversees will be able to centrally plan a “soft landing” for the U.S. economy. They wrote with straight faces. Somewhere they quoted Treasury Secretary Janet Yellen essentially wishing Powell well, but expressing skepticism that he’d be able to plan a positive economic outcome that is the equivalent of Kerr benching Poole for part of the second half for going 6-for-6 from 3-point land in the first half. Something about being good causes a player to be bad, so bench him before being good causes bad?
Again, so ridiculous is the “serious” (to economists, and their enablers in the media) notion of “soft landing” that it’s hard to even describe without feeling foolish for describing it. Of course, Hilsenrath and Timiraos might say that a “hot economy” would cause inflation because demand would outstrip supply, and they would be wrong. All demand is a consequence of supply.
Furthermore, the instigator of economic growth is investment; the latter what enables greater production at falling prices. Economic growth is a consequence of productivity, or better yet growth is productivity. Which means economic growth is by its very name a sign of falling prices. And no, the latter is not deflation. Economic activity that brings down prices by its very name introduces new wants for market goods formerly out of reach. Inflation is currency devaluation. Which means it’s a policy choice. But in a sense that’s a digression given the total redefinition of inflation that Hilsenrath and Timiraos are attempting.
In which case let’s pretend that their definition is correct. As opposed to inflation being a devaluation of the currency (what it’s always been), let’s assume for a second that it’s caused by us succeeding too much. When we’re too productive, when we’re doing too well, when we’re hitting too many 3-pointers of the business variety, the Fed must step in to stop us from getting better. So that we don’t suck for getting too good, or something like that, the Fed must “put on the brakes.”
Ok, but the problem with what Hilsenrath and Timiraos imagine about the U.S. economy is that what they imagine has nothing to do with the U.S. economy. The Fed projects its well overstated influences through banks that are but a small – and shrinking – source of credit in the U.S. And that’s just in the U.S.
Lest readers forget, businesses seek monetary loans and investment for what the money can be exchanged for. Yes, real market goods and labor that they can access in order to expand. Which means that if the Fed can actually render so-called “money supply” and credit access more difficult via rate machinations or open-market operations, credit is produced globally. What the Fed allegedly takes will be quickly made up for by myriad global sources of credit. Reducing it all to the absurd, imagine if the Fed engaged in massive bond selling to Silicon Valley banks in order to drain Palo Alto of money. It would be of no consequence. Market actors would erase the Fed’s attempt at central planning or “soft landing” within minutes. Resources and money flow to their highest uses with great force, and without regard to central banks.
Bringing it all back to Poole, he’s an individual. And no sane NBA person would seek to neuter an individual. Stars are the source of the League’s abundant prosperity. So true. Similarly true is that the U.S. economy is just a collection of individuals, the business stars are similarly the big drivers of our prosperity, at which point efforts to shrink them are every bit as ridiculous as it would be for the League to target Poole for a “soft landing.” Really, do serious people still take any of this Fed mysticism seriously?
