Twenty-first century voodoo economic theories pushed worldwide by populist politicians are speeding the world to the edge of a global downturn. One by one, democratically elected leaders are taking down their smart economists and promoting their own questionable — and politically motivated — ideas about interest rates and banking practices.
Turkey and the United States are the latest nations whose presidents are pressuring or pushing out their reliable economic advisers, replacing them with ideological loyalists. These presidents’ makeshift monetary mumbo-jumbo is aimed at achieving short-term economic and political gain. As a result, corrections and recessions may be temporarily delayed, but continually loom right around the corner.
From Ankara to Washington, heads of state are demanding that their previously apolitical national bankers cut interest rates to grow their economies, spur investment and combat unemployment. The message to central bankers is clear: Drop the cost of money or lose your job. It’s not an idle threat. READ MORE