The Pronk Pops Show 1406, March 4, 2020, Story 1: President Trump Wins All 14 States and Over 740 Delegates On Super Tuesday and Has Total Delegates of 859 With 1,276 Delegates Needed To Win Republican Nomination for President — Americans Love A Winner — Videos — Story 2: Democrats Deeply Divided — Democratic Establishment Candidate Creepy Sleepy Dopey Joey Biden vs. Radical Extremist Democratic Socialist (REDS) Bernie Sanders — Lying Lunatic Leftist Losers vs. Trump The Winner — Americans Love A Winner — Videos — Story 3: Containing Circulating COVID-19 Communist Chinese Cough Crisis Chaos — Do Not Touch Your Face and Wash Your Hands to Prevent Droplet Spreading and Infecting — Videos — Story 4: Federal Reserve Cuts Target Federal Fund Rate By 50 Basis Points or .5% To 1.00% to 1.25% — Return of Easy Monetary Policy — Bubble Blowing — Is Quantitative Easing or Money Printing Next? — Absolutely — Videos– Story 5: United States Stock Market Corrected for Bubble Prices — Stock Market Prices Surge

Impeachment couldn’t stop President Donald Trump’s job approval from rising, but the coronavirus might. As Americans’ near-term view of the economy soured in February, amid worry over the coronavirus and a Dow Jones correction, Trump’s job approval rating relapsed.

President Trump Job Approval

Just 41% of Americans approve of how President Trump is handling his job, while 54% disapprove, the March IBD/TIPP Poll finds. That negative 13-point differential has nearly doubled in the past month. In late January, Trump’s job approval registered 44% and disapproval 51%.

Now just 37% of independents give Trump positive reviews, while 57% disapprove. That’s down from 39%-53% in late January.

Trump Job Approval Slumps With Economic Outlook

The drop in Trump’s job approval coincides with a sudden shift in the economic outlook. The U.S. economic outlook just suffered its biggest one-month drop since October 2013 amid spread of the coronavirus, the March IBD/TIPP Poll finds.

The six-month economic outlook index fell to a modestly pessimistic 47.8 from a strongly optimistic 57. Readings above the neutral 50 level reflect optimism.

Trump continues to get positive ratings for his handling of the economy, with 47% approving and 35% disapproving. Still, that’s a big comedown from late January. Back then, 53% of Americans rated his handling of the U.S. economy as good or excellent, while just 28% give him a negative rating.

Trump Slips In Matchups Vs. Democrats

Joe Biden leads Trump 49% to 46%, the March IBD/TIPP Poll finds, after Trump had cut the margin to 49%-48% in late January.

Sanders now leads Trump 49% to 47%, having trailed 47%-49% a month earlier. Warren leads Trump 48% to 46%, a reversal of her 46%-50% deficit.

Still, a narrow popular vote edge would not necessarily translate into an Electoral College victory for Democrats.

Trump leads all Democrats among self-described investors, with a four-point lead over Biden. He leads Sanders by seven points.

The IBD/TIPP Poll reflects responses from 908 adults contacted via mobile phones and landlines from Feb. 20-29 and carries a 3.3-point margin of error.

Please follow Jed Graham on Twitter at @IBD_JGraham for coverage of economic policy and financial markets.

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Expansionary monetary policy constitutes a transfer of purchasing power away from those who hold old money to whoever gets new money. This is known as the Cantillon Effect, after 18th Century economist Richard Cantillon who first proposed it. In the immediate term, as more dollars are created, each one translates to a smaller slice of all goods and services produced.

How we measure this phenomenon and its size depends how we define money. This is illustrated below.

Here’s GDP expressed in terms of the monetary base:

Here’s GDP expressed in terms of M2:

And here’s GDP expressed in terms of total debt:

What is clear is that the dramatic expansion of the monetary base that we saw after 2008 is merely catching up with the more gradual growth of debt that took place in the 90s and 00s.

While it is my hunch that overblown credit bubbles are better liquidated than reflated (not least because the reflation of a corrupt and dysfunctional financial sector entails huge moral hazard), it is true the Fed’s efforts to inflate the money supply have so far prevented a default cascade. We should expect that such initiatives will continue, not least because Bernanke has a deep intellectual investment in reflationism.

This focus on reflationary money supply expansion was fully expected by those familiar with Ben Bernanke’s academic record. What I find more surprising, though, is the Fed’s focus on banks and financial institutions rather than the wider population.

It’s not just the banks that are struggling to deleverage. The overwhelming majority of nongovernment debt is held by households and nonfinancials:

The nonfinancial sectors need debt relief much, much more than the financial sector. Yet the Fed shoots off new money solely into the financial system, to Wall Street and the TBTF banks. It is the financial institutions that have gained the most from these transfers of purchasing power, building up huge hoards of excess reserves:

There is a way to counteract the Cantillon Effect, and expand the money supply without transferring purchasing power to the financial sector (or any other sector). This is to directly distribute the new money uniformly to individuals for the purpose of debt relief; those with debt have to use the new money to pay it down (thus reducing the debt load), those without debt are free to invest it or spend it as they like.

Steve Keen notes:

While we delever, investment by American corporations will be timid, and economic growth will be faltering at best. The stimulus imparted by government deficits will attenuate the downturn — and the much larger scale of government spending now than in the 1930s explains why this far greater deleveraging process has not led to as severe a Depression — but deficits alone will not be enough. If America is to avoid two “lost decades”, the level of private debt has to be reduced by deliberate cancellation, as well as by the slow processes of deleveraging and bankruptcy.

In ancient times, this was done by a Jubilee, but the securitization of debt since the 1980s has complicated this enormously. Whereas only the moneylenders lost under an ancient Jubilee, debt cancellation today would bankrupt many pension funds, municipalities and the like who purchased securitized debt instruments from banks. I have therefore proposed that a “Modern Debt Jubilee” should take the form of “Quantitative Easing for the Public”: monetary injections by the Federal Reserve not into the reserve accounts of banks, but into the bank accounts of the public — but on condition that its first function must be to pay debts down. This would reduce debt directly, but not advantage debtors over savers, and would reduce the profitability of the financial sector while not affecting its solvency.

Without a policy of this nature, America is destined to spend up to two decades learning the truth of Michael Hudson’s simple aphorism that “Debts that can’t be repaid, won’t be repaid”.

The Fed’s singular focus on the financial sector is perplexing and frustrating, not least because growth remains stagnant, unemployment remains elevated, industrial production remains weak and America’s financial sector remains a seething cesspit of corruption and moral hazard, where segregated accounts are routinely raided by corrupt CEOs, and where government-backstopped TBTF banks still routinely speculate with the taxpayers’ money.

The corrupt and overblown financial sector is the last sector that deserves a boost in purchasing power. It’s time this ended.

https://azizonomics.com/2012/08/07/the-cantillon-effect/