“How Much Should a Currency Be Worth?”

That’s the title of Ian Talley’s piece in a recent Wall Street Journal online edition. The question arises from the People’s Republic of China’s open manipulation of its currency through its control of the yuan’s exchange rate in the currency markets. The PRC executes this manipulation by limiting the range of values within which the yuan is permitted to trade in those markets.

The question gains currency (sorry) as Congress contemplates adding an anti-currency manipulation clause to the Trans-Pacific Partnership free trade pact or to the fast track trade bull currently in progress of a sort. But that’s currency manipulation from the other side of the matter: instead of a country manipulating its own currency, this clause says the currency must be manipulated according to our imperatives:


South Carolina Republican Senator [Lindsey Graham], speaking on “CBS This Morning,” said he’ll formally unveil his campaign plans in his hometown of Central, SC.

But he also repeatedly used the phrase “I’m running….”

Regardless of what we might think of Graham’s work in the Senate, in particular concerning immigration, foreign policy, and our handling of the Daesh, this is a level of indiscipline that we don’t need in the White House.

Market Disruption

…is what happens in a free market, and one result is wealth redistribution, not by inefficient, politically motivated government mandate, but morally and efficiently by voluntary exchange among market participants—folks like you and me. One example of this is the price of taxi medallions.

…leading cabbies and fleet owners throughout the USA worried that their industry will be decimated if local and state government doesn’t intervene.

In Chicago, which has the country’s second biggest fleet with roughly 7,000 taxis, the median sale price for a medallion hovered around $70,000 in 2007 before reaching a median sales peak of $357,000 in late 2013.

Those Are Some Bills, Bill

“I gotta pay our bills,” says Bill Clinton about his $500k per speech fees. That’s nice work, and I don’t begrudge him a penny of it or the easiness of his earning it.

But is it really just to pay some bills?

Hillary Clinton and former President Bill Clinton earned more than $25 million combined in speaking fees since January 2014, Fox News confirmed Friday.

Hillary, by the way, gets upwards of 200 large for her gigs.

Those are some bills.

Interest Rates and Economic Recovery

The Fed has been actively suppressing interest rates, keeping them near zero, for a long time. This is in addition to the Obama administration’s economic policies, and the two attitudes have combined to produce an economic recovery from the Panic of 2008 that is one in name only. See this graph, adapted from one in a recent Wall Street Journal to see just how bad the current “recovery” is. The numbers other than the two first quarter 2015 are average annualized rates of increase.EconomicRecovery_Cropped-Resized

Timidity of Smart Diplomacy

Motorboat Skipper and Guy Who Sits In the Secretary of State’s Chair John Kerry is demonstrating it.

This is what People’s Republic of China Foreign Minister Wang Yi said Saturday about the PRC’s occupation of the South China Sea and its construction on some of the islands of the Spratly Islands group:

The determination of the Chinese side to safeguard our own sovereignty and territorial integrity is as firm as a rock and it is unshakable. It is the demand of our people on our government as well as a legitimate right of ours.

This is Kerry’s response:

Special Snowflakes

…gotta be part of the blizzard. That’s the opening lament of a collection of graduate pupils in the University of California’s Master of Arts program in Art and Design. These Magnificent Seven, an entire class of the program and who have completed a year of it, wrote a letter explaining their decision to withdraw en masse from the program and posted it on the Art&Education Web site.

Some high points of their letter follow.

We are a group of seven artists who have been forced by the school’s dismantling of each of these elements to dissolve our MFA candidacies.

Help, or Watch?

Unfortunately, we already know which President Barack Obama will select, as he’s made clear in another venue.

The cause for concern this time is the economic strait in which Ukraine finds itself.

The contraction in Ukraine’s economy accelerated to 17.6% in the first quarter compared with a year earlier, the State Statistics Service said Friday, hammered by a conflict with Russia-backed separatists in its eastern industrial heartland that has slashed industrial output.

The Obama Guarantee

President Barack Obama made this guarantee in his statement at the end of his recent Meeting of the Deputies involving the Gulf Cooperation Council national leadership seconds.

The United States is prepared to work jointly with the GCC states to deter and confront an external threat to any GCC state’s territorial integrity that is inconsistent with the UN Charter. In the event of such aggression or the threat of such aggression, the United States stands ready to work with our GCC partners to determine urgently what action may be appropriate, using the means at our collective disposal, including the potential use of military force, for the defense of our GCC partners.

Banks, Government, and Risk

Fed governor Jerome Powell, in remarks prepared for a conference of community bankers in New York, said banks under a certain asset level, “perhaps $10 billion,” should be exempt from Dodd-Frank compensation restrictions. The restrictions, which are being developed by the Fed and other agencies, are designed to remove encouragements for bankers to take excessive risk.

Couple things about this. Why $10 billion? Why not $20 billion? Why not $5 billion? Based on what logic is this limit chosen? Based on what logic is any limit chosen? How is “system risk” from bank failure, the putative rationale for Dodd-Frank at all, a lesser risk than government’s intervention into the market place?