Once upon a time, in a faraway land, we'll call America, lived the world's most sophisticated economic planners and prognosticators.
Yet, in spite of their obvious sophistication, they seem unable to recognize even the most obvious.
Now our tale is purely fictional, and all the names in our tale are purely fictional.
Now in this land lived a kindly old President, err King, (purely fictional), named Joe Biden.
Now, King Biden had a problem. On the west coast of his land lived a great and powerful Dragon, named Supply Chain.
And Supply Chain was absolutely destroying America's economy. Unless something was done and done quickly, the Dragon named Supply Chain would destroy America's economy, and perhaps the country itself.
The King acted quickly, he called upon one of his mightiest Knights, the Knight who was in charge of slaying dragons of transportation. Sir Pete Buttigieg. I told you all these names are purely fictional.
Now Sir Pete promised that he would slay the dragon forthwith, and everything would return to normal once again.
But it turned out that Sir Pete had a baby. I didn't think that men could have babies.
I told you it's a fairy tale.
So Sir Pete could not slay the dragon. In fact, he couldn't even go to the West Coast.
And so the dragon, Supply Chain, grew stronger and stronger.
And continued to choke off the very goods and supplies that the Average Americans needed to live.
In desperation, the President, err I mean King, turned to his chief banker, Sir Jerome of Powell, and asked if there were anything he could do to help the situation.
I'll assemble all my minions, declared Sir Jerome of Powell. The analysts and sooth Sayers, the finest minds in all the land. We'll come up with a solution. The dragon will be banished.
And so Sir Jerome of Powell assembled all of his analysts and sooth Sayers. For days they worked, providing all the clever and mathematically perfect solutions.
Sir Jerome of Powell returned to the president err I mean king. I have the answer he declared. At last, declared the King, you've found a way to slay the Supply Chain Dragon. Prey tell what is it?
Well, King, replied Sir Jerome, we'll raise interest rates.
How will that slay the Supply Chain Dragon? yelled the King.
Your majesty, it won't slay the dragon. But it will show the public that we're doing something. And we can tell them it's in their best interest. After all, it will raise their cost of living.
Let it be done...
Well, I've heard some pretty tall tales in my day. But what we were told on Wednesday ranks among the very tallest of tales.
Something that would be almost humorous, if it weren't so deadly serious.
There we were Wednesday, listening to the Fed Chairman speak. And as is becoming the company line in Washington, we were once again told that the principal problems in the Economy were the Pandemic and the Supply Chain Issues. And that these were the principal cause of the inflation we currently struggling with.
To that, I agree wholeheartedly.
The principal problem with the economy, aside from the Pandemic, is the Supply Chain. And putting aside the Pandemic for a moment. How is it exactly that we're addressing the problem of the Supply Chain?
I'm no logistics expert, but my sense of it is that the Supply Chain has a lot more to do with trucks and crews and actually moving cargo, than anything to do with Interest Rates.
And it's borderline absurd to think that it does.
The opportunity, like so many things in this Administration, was missed when the Secretary of Transportation, Pete Buttigieg took maternity/paternity leave.
And although the problem has been now festering for these many months, still the solution to the Supply Chain and the cure for much of our inflation still lies with Secretary Pete. And it won't get better until we have some initiative from that Department.
Overall it is true that we are seeing several rising issues in this economy. The tight labor market, a potential decline in retail spending, etc, etc. I could go on, but you get the message.
And yes, inflation is certainly one of the economic issues that need to be dealt with. The question, at the moment, is which fire to attack first.
And to me, the Fed Chairman set out our priorities at the beginning of his statement, when he pointed to the Supply Chain. The one issue that threatens to put the entire economy into recession.
So while we need to deal with all the economic issues eventually, the one to focus on today is Supply Chain.
It's our biggest dragon and the one that needs to be addressed now, not later.