Neel Kashkari, famous for coming out several days ago and giving one of the most bizarre 60 Minutes interviews of all time (an interview in which he claimed that the Fed had "infinite" cash) is now out giving life-lessons about when and how the American people should be worrying about moral hazard.
In an op-ed written late last week in the Washington Post, Kashkari made his argument that throwing as much money at the problem as possible, even if we don't have a complete understanding of where that newly-printed cash is going, is the solution.
In other words, we've got the cash and so now, we can be the moral authority as well.
Kashkari stated: "If there is a principle policy makers need to keep in mind going forward, it’s this: Err on the side of helping as many workers and businesses as possible rather than on prudence. This is not the time to worry about moral hazard or whether people are incentivized not to work."
He continued: "When the Covid-19 crisis is behind us, if our biggest complaint is that some workers and small businesses got help when they didn’t really need it, that would be a wonderful outcome for our country.”
Kashkari seemed to make the argument that since the Fed was already printing unlimited amounts of cash, they might as well use it to shore up as many liabilities that existed prior to the crisis anyway: “Policy makers should use the full authority Congress grants to immediately make sure that states have the health-care resources and equipment they need, that businesses have the wherewithal to preserve their staffs, and that individuals and families can make ends meet until the virus is contained”
“The highest priorities must be to enable the health-care system to catch up and control the spread of the virus — and to maximize the number of jobs saved. It is far better to spend taxpayer money to help small businesses retain their workers than to spend the same money helping workers after they’ve been laid off,” he continued.
Recall, during Kashkari's 60 Minutes interview a week ago, Kashkari, when asked if the Fed would just "literally print money", admitted:
"That's literally what congress has told us to do. That's the authority they have given us, to print money and provide liquidity into the financial system. We create it electronically and we can also print it, with the Treasury Department, so you can get money out of your ATMs."
Kashkari's God complex continued when he was asked: "Can you characterize everything the Fed has done this past week as essentially flooding the system with money?"
To which Kashkari responded simply: "Yes. There's no end to our ability to do that."