onsdag 15 juli 2015

Hur bör den ekonomiska politiken och den monetära politiken utformas?

(Rekommenderar starkt George Coopers bok "the origin of financial crisis". Boken är förhållandevis kort, men väldigt läsvärd. Många av tankarna är inte direkt revolutionerande, men boken tillför en helhet. När man läst boken lämnas man med en känsla av att vårt ekonomiska system är dysfunktionellt och att nationalekonomi är en hittepå verksamhet. Boken släpptes drgyt 6 månader innan Lehman gick omkull.

George Cooper framhäver framförallt Minskys tankar. Nationalekonomi är ingen vetenskap, utan på sin höjd en filosofi om hur man bäst bör styra vårt ekonomiska system.)

Minsky fokuserade på kreditexpansionen i det ekonomiska systemet och mängden krediter i ekonomin. Cooper menar att centralbankerna bör fokusera på mängden krediter i ekonomin och menar att det är denna kreditgivning som driver på ekonomiska uppgångar och nedgångar.

Centralbanker anser att marknaderna är effektiva och inte behöver någon intervention så länge de går upp. Så fort marknaderna faller så försvinner principen om "effektiva marknader" och centralbankerna intervenera för att stödja den "effektiva marknaden", som helt plötsligt är oförmögen till effektiv prissättning. Uppåtgående tillgångspriser är okej och om de däremot skulle gå ner är något "fel".

"The idea that markets are always correctly priced remains a key argument against central banks attempting to prick asset price bubbles. Strangely, however, when asset prices begin falling the new lower prices are immediately recognized as being somehow wrong and requiring corrective action on the part of policy makers." (George Cooper, s 10)

Centralbankernas tendens att intervenera i fallande marknader, utan en lika stark motriktad interventionen i uppåtgående marknaderna leder till en asymmetrisk monetär politik. En asymmetrisk monetär politik innebär att centralbanker försöker driva upp tillväxten till varje pris, istället för att föra en symmetrisk monetär politik där både uppgångar och nedgångar skall mildras.

"The overall thrust of these suggestions is that avoiding the financial tsunamis comes at the price of permitting, even encouraging, a greater number of smaller credit cycles. And also at the price of requiring central banks to occasionally halt credit expansions. That is to say, the central banks must be required to prick asset price bubbles. Key to the success of any such policy will be a political climate that accepts the need for symmetric monetary policy; excessive credit expansion should be fought with the same vigour as is used to fight excessive credit contraction."(George Cooper, s 3)

Centralbanker för inte en symmetrisk monetär politik eftersom om inflationen understiger 2% anses ekonomin inte fungera normalt. Inflationsmålet på 2% är förstås helt ologiskt och leder till att den finansiella stabiliteten åsidosätts. Alla normalbegåvade individer förstår att konsumenter inte slutar konsumera för att inflationen "anses" vara en 1% för låg. George Cooper menar att den asymmetriska politiken bedrivs för att "bubblor" ej anses kunna identifieras på förhand.

"Even if we were unwise enough to wish to prick asett price bubbles, we are told it is impossible to see the bubble while it is in its inflationary phase. We are told, however, that by some unspecified means the bubble`s camouflage is lifted immediately as it begins deflating, thereby providing a trigger for prompt fiscal and monetary stimulus" (George Cooper, s 3)

Tidigare visste centralbankirer att den monetära politiken inte var till för att bygga upp bubblor och kortsiktigt blåsa upp tillväxt, utan det krävdes en symmetrisk monetär politik.

"Old school central bankers were aware of the problems of asymmetric monetary policy. To quote William McChesney Martin, the longest serving chariman of the US Federal Reserve:

"The job of the Federal Reserve is to take away the punchbowl just when the party gets going""(George Cooper, s 138)

George Cooper menar att en ändlös kreditexpansion, där alla ekonomiska nedgångar undviks, inte är önskvärt.

"If we are to break out of thise damaging cycle of booms and busts, all participants in the economy must recognize the proper role and limitation of macroeconomic policy. Politicians and voters must acknowledge that it is neither possible nor desirable to use fiscal and monetary policy to immediately counteract any and all economic downturns. Central banks must return to their core purpose of managing the credt process and must learn to resist political and private sector pressure for an endless credit-fuelled economic expansion." (George Cooper, s ix)

Enligt George Coopers bör man inte se alla ekonomisk nedgångar som katastrofala, utan som en naturlig del av en marknadsekonomin. Dessa tankar efterliknar de Seth Klarman och Nassim Taleb har fört fram.

"To achieve this policy would require recognition of the importance of curtailing both excessive credit creation and excessive credit destruction, and a reapprasial of our attitude to central bank policy and economic cycles. Ideallt we should move beyond considering all economic contractions a symptomatic of policy failure, viewing them instead as a normal part of the operation of a healthy vibrant economy." (George Cooper, s 159)

Seth Klarmans tankar från 2013 är som ett eko av George Coopers:

Alan Greenspan's mantra was that the Fed couldn't possibly identify financial bubbles before they burst; it is better for the government to clean them up after they implode. I couldn't disagree more strongly. Asymmetrically truncating investors' downside risk, without an equal and opposite intervention to limit bubble-like upside, is highly pernicious. For decades, financial institutions and individual investors have come to expect limited financial market downside due to such government interventions. With downside artificially constrained and upside driven by the forces I've described, a purported era of "Great Moderation" prevailed through 2007 - one of low volatility and shallow downturns. Such conditions were used to justify increasingly lax lending standards (because few loans went bad amidst steadily rising asset values) and, because of the availability of credit and its low cost, a monumental expansion of leverage. All these things that propel markets higher, that limit downside volatility, that drive perceptions of risk lower, sow the seeds for periodic collapses such as the one in 2008, that are far more devastating than would happen otherwise.

Nassim Taleb, author of the new book, Antifragile, praises volatility and criticizes those who would artificially dampen it at great unseen cost. Taleb writes: Stifling natural fluctuations masks real problems, causing the explosions to be both delayed and more intense when they do take place. As with the flammable material accumulating on the forest floor in the absence of forest fires, problems hide in the absence of stressors and the resulting cumulative harm can take on tragic proportions. And yet our economic policy makers have often aimed for maximum stability, even attempting to eradicate the business cycle."

A juiced-up stock market is seen as stability? A policy that creates such "stability" and from which there is no apparent exit is seen as wise and even successful? And the policy must be continued because it was so ill-conceived that it cannot be ended? The Greenspan Bernanke put exists because even the hint of a minor economic downturn has for decades been viewed by government officials as a crisis so extreme that it must be warded off at all costs. Thus, we have created the twin illusions of limitless prosperity and the taming of economic volatility at the high cost of ever-expanding deficits, overleverage in the consumer and government sectors, extreme moral hazard, and episodic market meltdowns. Economist Hyman Minsky has posited the simple but brilliant notion that stability leads to instability. Low economic volatility, by enticing lenders to make low-cost loans available to historically risky borrowers and by encouraging borrowers to take on ultimately unaffordable debts, creates conditions ripe for destabilizing credit hubbies to form, expand, and eventually collapse.

Cooper beskriver sedan konsekvenser av en alltför proaktiv monetär politik, där centralbanker försöker förhindra varje ekonomisk nedgång. Denna politik har vi bevittnat sedan Greenspann blev centralbankschef. Konsekvenserna av en sådan politik är att belåningsgraden i ekonomin successivt stiger och framtida stimulanser blir mindre verkningsfulla.

"If succesful, this proactive version of keynesian policy can avoid a recession altogether, or atleast make it much shallower and less painful than it would otherwise have been.

However the successes of pre-emptive keynesianism means that borrowers are denied the opportunity to learn that their excessive borrowing was indeed excessive. As each fledgling recession is successfully prevented by the goverment and the central bank, the private sector borrowers become progressively  more confident and therefore willing to build up an even greater stock of debt. However, as the debt stock builds it becomes progressively more difficult for the stimulus policies to offset future downturns." (George Cooper, s 83)

Sedan 2009 har ekonomin vuxit sakta trots enorma stimulanser, nollräntor och manipulation av tillgångsklasser. Som George Cooper påpekar framstår försöken att stimulera ekonomin som allt mer verkningslösa, samtidigt är ekonomin överbelånad och ömtålig för oväntade händelser.

"Over time the successful implementation of demand management means that the economy goes through successive waves of credit expansions. However, as the stock of debt rises the central bank eventually reaches a point whereby lowering interest rates is not sufficient to encourage more private sector borrowing; private sector refuse to pass on the central banks lower interest rates, and anyway, borrowers become more concerned over their ability to pay off their stock of debt as well as their abiliy to meet interest payments. Once this point is reached the central bank is left with an ineffective monetary policy, and a highly indebted economy." (George Cooper, s 87)

I slutet av boken föreslog George Cooper tre lösningar på de förhöjda skuldnivåerna och de tre lösningarna var austerity, blåsa upp en ny bubbla eller inflation. Vi vet förstås alla vad centralbankirer och regeringar valde:

"Alternatively we could attempt to encourage yet another massive debt-fuelled spending spree, using fiscal and monetary stimulus, in the hope of triggering another self-reinforcing expansion, with sufficient power to negate the current contraction. In the short term, this strategy would appear more palatable than the free market solution.

(...) Even if we could find another credit bubble to inflate, a further layer of debt-fuelled spending would only delay and amplify the problems. This strategy is also inadvisable" (George Cooper, s 166)

Keynesianer påpekar förstås att Spanien är i en djup kris och att USA går "jättebra". Skillnaden är att Spanien tagit tag i sina problem och USA inflaterat en nya bubblor i ett desperat försök att skapa "tillväxt". Kina är förstås värst av alla länder och skuldexpansionen i den ekonomin saknar nästan motstycke. En del av åtgärderna under djupet av finanskrisen var förstås lämpliga, men snabbt övergick dessa åtgärder till bubbelblåsande.

2009 visade det sig vara svårt att driva upp skuldsättningsnivåerna ytterligare och elda på mer kreditgivningen. Därför har många centralbanker försökt inflatera tillgångspriserna i ett försök att skapa tillväxt i form av en "wealth effect". Att beskriva denna policy som icke genomtänkt är förstås en underdrift, den är idiotisk. Detta gigantiska inlägg avslutas med lite tankar från Ben Bernanke och Seth Klarman.

Ben Bernanke november 2010

Rather, he said he envisioned a “virtuous circle” of “higher incomes and profits” that would “support economic expansion” and “promote increased employment and sustain price stability.”
What would propel this virtuous circle into motion? “Higher stock prices,” Mr. Bernanke said. They “will boost consumer wealth and help increase confidence, which can also spur spending,” he added.
And what proof was there that the policy was working? He cited the very rally in the stock and bond markets that had started when “investors began to anticipate the most recent action” of the Fed — namely, quantitative easing, or QE2, as it is called. (Länk)

"Optimists (and there are some) think we will continue to navigate carefully between deflation and runaway inflation, and that the U.S. will muddle through the ongoing global deleveraging.That would be a fine outcome, particularly since other scenarios are much worse. But can you really say that an economy is healthy when it achieves an increment of short-term growth at the cost of a worsening long-term debt picture? In fact, weren’t myriad past attempts to steer the economy through its inevitable troughs responsible for some of the dampened volatility and consequent overleverage that led to the 2008 collapse and current stagnation? Our economy is walking on a narrow tightrope over a vast crevasse, and if we lose our precarious balance--if the economic winds unexpectedly gust one way or another, or if a geopolitical storm arrives--who knows how far we could fall?

(...)Leverage is always a double-edged sword, and in 2007 excessive leverage at all levels of the economy had eroded our country’s margin of safety. Stimulative effects of additional leverage were having less and less impact on the economy, while debts grew larger and larger. When things went wrong in 2008, we had nothing to fall back on. There was no room for error, little cushion to give us time to refocus and rebuild. By artificially propping up our economy in the intervening years, keeping interest rates low, spending vast sums on programs to generate ephemeral demand, and rescuing failing enterprises, we have effectively been engaged in an attempt to return to 2007 and the very conditions that proved unsustainable and led directly to the 2008 collapse.

(...)Attempting to return to the fragile 2007 circumstances seems an odd and likely ill-fated idea, but our policy makers have not come up with anything better. Austerity, for example, is deemed politically unacceptable. While we are unlikely to willingly choose the path of austerity (and start living within our means again), it is increasingly plausible that austerity might choose us." (Seth Klarman, Baupost annual letter 2012)

Government effort to pump stocks higher is expensive and distortive. And if the impact will only be ephemeral, if what goes up is certain to come back down, then the consequence is bound to be increased volatility, more financial catastrophe, and possibly an endless cycle of propping up followed by collapse, perhaps with greater and greater amplitude and, looking back, ultimately without any purpose other than as a short-term palliative for psychological or political purposes.(Länk)

4 kommentarer:

  1. Speciellt talande, av det du skriver, är hur Spanien ses som en "dålig" ekonomi och USA som en "bra". Det är märkligt att marknaden inte reagerar mer rationellt på den information som faktiskt finns om läget idag. Nu är ju inte marknaden helt rationell, på kort sikt, så den har väl inte räknat med de risker som finns.

    1. Man undrar vad George Cooper tycker efter alla dessa år sedan boken publicerades...