Business

THE DISMAL SCIENCE | Venezuela Can’t Feed Its Cats

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Long lines and empty shelves plague Venezuela’s grocery stores as its economic crisis shows no signs of stopping. Pets are also feeling the effects of the prolonged food shortages as residents are struggling to spare a single morsel, according to a report by CBS. The South American nation traditionally relies on foreign goods to stock its stores, but imports are down 40% from last year, according to a report by NPR. The reason for such a sharp cut is simple: the government is running out of money. It is easy to blame the problem on a worldwide slump in oil prices.

Business

CONSCIOUSLY LIBERAL | On Monetary Policy for the People

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In conjunction with low interest rates, the cash for trash program, or quantitative easing (QE), has led to inflation in asset prices, including housing. In exchange for toxic assets and treasury bonds, QE was supposed to flood banks with cash in order to encourage lending and thus stimulate growth. In the end, most of the cash was held in bank reserves. Banks were not ready to loan out money because interest rates were low (and still are), compounded with the insecurity of high private debt and stronger credit regulation. If Fed policymakers are trying to stimulate growth, propping up asset prices at pre-crisis levels seems contrary to basic thinking.