Tuesday, March 31, 2020

The Political Management of the Coronavirus Crisis

Since interventions are ordered by policymakers, almost everyone is now thinking of economic and monetary policy measures to reduce the damage.

Monetary policy should then no longer redistribute wealth to the wealthy but should serve as an instrument and facade for redistribution from the haves to the have-nots.

Monetary policy replaced fiscal policy precisely because the former had already been exhausted.

In an economy distorted by monetary policy, the greatest gains in wealth are always to those who, consciously or subconsciously, best anticipate the consequences of central bank policy.

A basic income for everyone created by monetary policy sounds charming, but it suffers from the fact that basic purchasing power for everyone cannot be created by monetary policy, but only by productivity.

Nearly all monetary, fiscal, and economic policy measures-if they are geared toward fixing damage, rewarding an inability to learn, thwarting structural adjustment and further undermining sustainable foundations of productivity-lead to a spiral of intervention.

The best and most urgently needed policy measure at present would be: Immediate tax exemption of all labor income related to the care of intensive care patients and of all business turnover related to the production of technical aids for pandemic management.


No comments: