The Dow Jones lost 1,033 points today, February 8. It was only 145 points below the biggest one-day drop in Dow's history, which occurred on Monday, February 5. And so, before this business week closed, the market experienced two record breaking sell-offs. The situation is now officially called a correction. The leading explanation for it—fear of inflation—is connected to the observation that the first big market drop, the seventh-biggest ever, happened on February 2, right after the jobs report showed wages were increasing ("America finally got a raise").

The thinking is that this raise will cause inflation, which will then deteriorate the value of money. Mainstream economic policy since the Volcker-shocks of the 1980s has made low inflation a leading concern. It displaces full employment, which, it is believed, causes wages to rise. And when wages go up, the prices of goods go up with it. This situation is hated by creditors because a fall in the value of money favors those who have debts. Mainstream business websites point to the fear of inflation as the source of the current turbulence in the equity markets. In short, they are blaming labor.

But something else happened on Friday, February 2, that must be considered. It was the last business day for Janet Yellen, the 15th Chair of the Federal Reserve. She directed Obama's economy from February 3, 2014, up until the end of last week, and it's fair to say that her departure closed Obama's economy. We have now entered Trump's economy, and this has introduced uncertainty, and this uncertainty is more and more breaking the decade-long confidence in the market.

As economist John Mitchell explained at a recent event organized by the Puget Sound Business Journal, the "policymakers who got the Federal Reserve through the Great Recession have left. When Fed chief Janet Yellen is gone, there will be four vacancies on a seven-person board." He saw this as something that investors should worry about in 2018. The new Fed chief—who replaced Yellen for no good reason and a couple of bad ones (he is a white man and not a woman, he was not appointed by a black man)—Jerome Hayden Powell, is running a board that is mostly empty and unproven. My guess is that this is the source for much of the turbulence that mainstream media is solely attributing to inflation fears.

All this time, we have not been in a Trump economy. Even the explosion of buying that occurred when Trump won the presidential election in 2016 and continued until only last week resulted from a confidence that was established by Obama's economy. Trump made no significant structural or policy or personnel changes until very recently. All he did was accelerate Obama-era confidence with a dose of moral hazard. But a major component of that feeling of market soundness, Yellen, is now gone.

Here it is important to explain that Yellen is a neo-Keynesian. The metaphysics of this school of economics is that rich people can get things wrong and screw up the market economy to the detriment of not only of workers but themselves. The metaphysics of neoclassical economics, which has been the orthodox school since the 1970s, is that the rich get everything right every time. What business leaders want must surely benefit all. What workers want (higher wages, for example) must inevitably harm the economy, and even kill the jobs they need to survive. The neoclassical school has built a complex system of models and mathematics to show that the rich are never wrong. The metaphysics of post-Keynesians—who rarely get secure positions in university departments or are heard about in mainstream papers, and are called 'heterodox economists'—have far less faith in the market than neo-Keynesians and give a lot of weight to something that freaks out investors: uncertainty.

This is why post-Keynesians have socialist (or social democratic) proclivities; they see socialism as the best way to handle and manage uncertainty. But successful risk management of a social kind demands the de-concentration of wealth. And the most politically powerful members of our society, the rich, don't want to hear anything about that. Nor do they care for the metaphysics of Marxists, a school of economic thinking that basically sees the convoluted state of the economy as packed with contradictions that frequently explode. What is obvious to them is that a system generating golden eggs and fantastic pears of fictitious capital ("credit money, government bonds, shares") that grow much faster than the conventional economy is crisis-prone.

The neo-Keynesians are also aware of this danger (the dynamite in capital markets), but whereas Marxists hope that its blast will have the force to rip open the doors to a finally rational post-capitalist society, neo-Keynesians work tirelessly to defuse or postpone the danger with complicated policy tools that are at once pro-market and not totally pro-rich (the latter associates them with post-Keynesians; the former with the neoclassicals). For this school, which dominates the Democratic party, the right of the rich must be satisfied and kept in check at the same time. Only the most brilliant economists, such as Janet Yellen, can hope to pull off this trick.

In the world that ought to be, Yellen's mind would have been put to good use. The world that is has many problems that are neglected because so much mental energy is supplied to those that have very limited social importance. Yellen operated in this world, the one that is. Her great mind was used to protect the rich from the self-destruction that's central to Marxist eschatology. That mind is now gone. What happens next? The Trump economy has officially begun.