Flag it all you want, the writer is correct in their assertions.
ZIRP was an acceptable solution to the problem faced at the time. Its detractors rightly pointed out all the harms that would come from it, especially if it was left in place longer than necessary - and they’re all essentially vindicated in hindsight. Still, it got us out of the immediate hole by kicking the various problems down the road a bit in the hope that regulators and Congress would fix the issues permanently in the long run.
Obviously that didn’t happen, because when you give rich people and their asset managers free debt and government bailouts with no strings attached, they understandably don’t share the wealth (they wouldn’t be rich if they shared, after all). So the best we can do now is simply refuse to return to an era that exacerbated rampant speculation and irresponsible investing into burrito taxis, because we know the harms it will cause.
I also appreciate the callout of the opposing sides that are the present stock and bond markets. Stock market boosters see no end to the good that comes from ZIRP because they don’t ever have to worry about the ten-year outcome when they hold a position for less than a decade; bond holders, on the other hand, absolutely have to worry about these outcomes, and we’re seeing their anxiety in sectors with outsized exposure to bond yields - like the insurance industry dropping customers and raising premiums to offset record property valuations in areas overly exposed to climate change and disaster risks.
Viewed through that lens, and it’s the equivalent of a Doctor warning the patient that if they don’t start exercising and eating healthier today, they’ll be dead in a decade - and the patient figuring that’s tomorrow’s problem, then fucking off to McDonald’s for a large combo meal and a sundae.
It seems to me the assertions are mostly junk. Just from the title:
>The Stock Market Is Selling Its Soul and the Fed’s Independence to Trump Because ZIRP Broke The World
"The stock market doesn't have a soul" - it's a market where you can buy and sell equities which have done for some decades
"Fed’s Independence to Trump Because ZIRP Broke The World" - I don't think so. Trump is bullying the Fed because he wants to print money to compensate for his dumb tariffs.
"ZIRP Broke The World." Well, it caused problems but it would make almost as much sense to say I put on three pounds last week because ZIRP Broke The World. Cause and effect don't really line up.
I'm sorry, but is one of your honest arguments: well actually "the stock market doesn't have a soul"?
Fun fact, neither your parent nor the person who wrote article thinks the stock market has an actual soul.
(fwiw: this comment should not be construed as me agreeing with the article. I really don't have enough knowledge to even kind of consider it's veracity)
Presumably it was flagged due to the inflammatory nature of the article and the inevitable political posts (like this one I'm now responding to!) that would result.
For the record, the Fed did raise interest rates before COVID-era financial policy kicked inflation into high gear (this is the origins of Trump's ire for the Fed, because he generally wants to keep rates as low as possible while he's in office to juice economic growth), but backed off somewhat because the economy was not doing well and inflation was not the primary concern.
Your doctor analogy does not seem to show much understanding of how the stock and bond markets work or the insurance sector works.
Presumably also a little bit because sites like this are owned by VC capital that stand to gain or lose a lot on ZIRP policies, and have an unflagging belief in their infallibility - as well as many users here's income depending on startups backed almost entirely by VC funds. I also fail to see how the post you are responding to is political.
It's difficult to convince a person of something when they are paid not to understand it.
Also amused that ZIRP is permitted to be discussed freely in the context of VC funding rounds and its benefits on startup growth, but any sort of detraction or critique of its monetary policies is immediately flagged. If I had a tinfoil hat, I’d be inclined to make some claims as to why that might be, here.
I am also amused at the glut of anons happy to say I’m wrong in how something works, yet conveniently neglect to explain how I’m wrong or provide the “correct” perspective to have. At this point in my eTenure, I just assume that anyone saying I’m wrong but refusing to articulate the how/what/when/where/why of it are, themselves, actually wrong, otherwise they’d posit a counterargument instead of a drive-by “you’re wrong lol” and a downvote.
If? You can believe what you want, but dang and the other mods have said repeatedly that their owners are completely hands off. If you want to argue that the mods know where their bread is buttered and act accordingly, have at it, but don't pretend you aren't creating a (meaningless in the grand scheme of things) conspiracy theory.
> I am also amused at the glut of anons happy to say I’m wrong in how something works, yet conveniently neglect to explain how I’m wrong or provide the “correct” perspective to have. At this point in my eTenure, I just assume that anyone saying I’m wrong but refusing to articulate the how/what/when/where/why of it are, themselves, actually wrong.
It's a waste of time to argue with someone who is convinced they are right about something with zero evidence supporting their position. So again, believe what you want, but be aware of what you're doing.
Website moderation and discourse usually if not always reflects the values and beliefs of the people that own it. They don’t even have to be directly involved for this to be the case - but it’d be really silly to say this site doesn’t take a particular slant in favor of the people that own it. Whatever the cause that may be is of course a matter of debate, but pretending it doesn’t exist is silly.
ZIRP was an acceptable solution to the problem faced at the time. Its detractors rightly pointed out all the harms that would come from it, especially if it was left in place longer than necessary - and they’re all essentially vindicated in hindsight. Still, it got us out of the immediate hole by kicking the various problems down the road a bit in the hope that regulators and Congress would fix the issues permanently in the long run.
Obviously that didn’t happen, because when you give rich people and their asset managers free debt and government bailouts with no strings attached, they understandably don’t share the wealth (they wouldn’t be rich if they shared, after all). So the best we can do now is simply refuse to return to an era that exacerbated rampant speculation and irresponsible investing into burrito taxis, because we know the harms it will cause.
I also appreciate the callout of the opposing sides that are the present stock and bond markets. Stock market boosters see no end to the good that comes from ZIRP because they don’t ever have to worry about the ten-year outcome when they hold a position for less than a decade; bond holders, on the other hand, absolutely have to worry about these outcomes, and we’re seeing their anxiety in sectors with outsized exposure to bond yields - like the insurance industry dropping customers and raising premiums to offset record property valuations in areas overly exposed to climate change and disaster risks.
Viewed through that lens, and it’s the equivalent of a Doctor warning the patient that if they don’t start exercising and eating healthier today, they’ll be dead in a decade - and the patient figuring that’s tomorrow’s problem, then fucking off to McDonald’s for a large combo meal and a sundae.