In her speech to the Economic Club of New York yesterday (3/29), Fed Chair Janet Yellen vowed to move with extreme care before tightening monetary policy in the face of lingering global deflation and trouble in China.

She swatted aside vociferous hawks on the Fed’s voting committee (FOMC), more or less pledging to flood the economy with excess stimulus in order to guarantee a safety margin against any further deflationary shocks.  Her dovish comments set off wild moves on the currency markets and a powerful relief rally on Wall Street.

Mrs. Yellen is taking a major gamble.

A chorus of critics have warned that the Fed is falling behind the curve as the labor market tightens and commodity prices start to firm again, fearing a repeat of the 1970s when the institution repeatedly found excuses to delay taking action on the grounds that there was still plenty of hidden slack in the economy.

“The longer the Fed dithers, the higher rates are eventually going, ” said Paul Ashworth from Capital Economics.

America needs something better than a feedback loop for popular resentment. We need a real leader.

America's elite is arrogant and corrupt, but the state of the American people is just as alarming. America had 90% adult literacy in 1790, when only half of Englishmen and a fifth of Spaniards and Italians could sign their names. We had the best educated, most motivated, and healthiest workforce in the world by an overwhelming margin.

Now Americans aged 16 to 24 rank at the bottom of a 22-country evaluation  of numeracy, literacy, and technological problem-solving.

Poor student performance should be no surprise: America's family structure is falling apart. Nearly 30% of non-Hispanic white children are born out of wedlock, as well as 53% of Hispanics and 73% of African-Americans. When Reagan took office, 18% of all American births were to unmarried mothers. By 2014 the figure was above 40%.

Catch-up ball doesn't begin to describe our predicament. We need nothing short of a great national turnaround. There are two Republican candidates who made clear from the outset that it isn't business as usual -- Ted Cruz and Donald Trump. Another Romney wouldn't be relevant.

Interest rates in the United States have fallen to minus 2% in real terms and are dropping into deeper negative territory with each passing month. This is a remarkable state of affairs.

It is clear that the US Federal Reserve is now trapped. The FOMC dares not tighten despite core inflation reaching 2.3% because it is so worried about tantrums in financial markets and about that other Sword of Damocles - some $11 trillion of offshore debt denominated in dollars, up from $2 trillion in 2000.

The Fed has been forced by circumstances to act as the world's central bank, nursing a fragile and treacherous financial system struggling with unprecedented leverage.

Average debt ratios are 36 percentage points of GDP higher than they were at the top of the pre-Lehman bubble in 2008, and this time emerging markets have been drawn into the quagmire as well by the spill-over effects of quantitative easing. Like it or not, the Fed is stuck with the task of cleaning up a global mess that is arguably of its own making.

The three big blocs of the world economy are all in a short-term cyclical upswing. My fear is that the Fed may have repeated the error made by Alan Greenspan during the East Asia crisis of 1998 when he slashed rates and held them too low for too long, fueling the dotcom bubble.

The paradox of the individualistic society is that it can only exist if individuals embrace virtues that are greater than their own needs and whims.

A society where each individual acts as a little tyrant, pursuing his desires with total selfishness at the expense of everyone else becomes collectivist as the little tyrants turn to a series of big tyrants to get what they want no matter who gets hurt by it.

As individual virtues and social compacts break down, selfish squabbles escalate. Tribalism turns into legal civil war. Laws become the means by which one group imposes its will on the other and by which one man seizes the property of another. The people come to view the system with contempt. All virtues and principles are abandoned as neighbor turns on neighbor in resentment and hatred.

Ideas can exist objectively. Feelings only exist subjectively. Identity politics resolves this problem by treating the objective response to feelings as privilege. But even subjective empathy can never truly approach the subjective experience of the crybully.

Even a member of that same identity group will differ in some way from the multiple intersectional identities of the crybully. And that difference is its own privilege. This isn't really politics. It's self-help narcissism crossbred with stale Marxism.