Tag Archives: political economy

St Louis Fed Fails

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The St Louis Federal Reserve Bank is busily going woke (my term, not Belongia’s and Ireland’s). They describe the following failure of the St Louis Fed:

The Federal Reserve Bank of St Louis is in the early stages of creating an Institute for Economic Equity “to support an economy in which everyone can benefit regardless of race, ethnicity, gender, or where they live,” with an emphasis on “economic outcomes experienced by historically marginalized groups.”

This is a two-pronged failure, and a double disaster if it comes to fruition. By its own description, the St Louis Fed’s IEE is racist and sexist at its core. Beyond that, by pushing outcomes rather than opportunities, the IEE is fundamentally socialist.

And what does the drive to create such an office say about the St Louis Fed’s president and board members?

Aiding and Abetting

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In response to the ransomware attack against JBS USA Holdings that briefly disrupted some of the company’s Australian and American operations, JBS paid the hackers $11 million—more than twice that paid by Colonial Pipeline in its cowardly reward to its attackers.

JBS paid those $11 million dollars in its own craven reward for its own privilege of having been hacked.

In many—most?—milieus, aiding and abetting a criminal in the performance of the criminal’s activities is a felony.

It needs to be one here, too. Rather than compensating ransomware hackers—which compensation is directly, if not solely, responsible for the current sharp rise in ransomware attacks—these criminals need a different sort of reward, one that withdraws current criminals from the board and that discourages others from deciding to play.

Yet More and Bigger Spending

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The House Problem Solvers Caucus, with 29 Progressive-Democrats and 29 Republicans, are proposing their own “infrastructure” bill—to the tune of $1.25 trillion dollars, more than double the Senate Republicans’ original proposal of some $570 billion (and which, in their own abject meekness, they exploded into a nearly trillion dollar supplication).

The Republicans in this “problem solver” gang are engaged in their own surrender to the spending and taxing Party.

Of course President Joe Biden (D) and his Congressional Party leadership aren’t negotiating in good faith—they don’t need to. They can hold out for everything in their original demand because they know they’ll get it.

A Question

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The Wall Street Journal had one regarding the several bills the Progressive-Democrats are taking up in the Senate now that Congress has returned from its extended long weekend vacation.

Will Senate Democrats be able to gain bipartisan support for any of their new initiatives?

The answer, of course, is No. Senate Progressive-Democrats aren’t interested in bipartisanship, so they aren’t looking for any. Senate Majority Leader Chuck Schumer (D, NY) and many of his fellow Progressive-Democrats have made this clear with

some Democrats…call for pressing ahead without Republicans. Democrats could pass tax and spending legislation with a simple majority, using a process called budget reconciliation….

And

Mr Schumer has made it clear Democrats are ready to go it alone if necessary on legislation, bringing bills to the floor that don’t have enough support to pass under current rules.

That’s an effort to put the Republicans on the record as voting against Progressive-Democrat priorities, but more importantly, it’s a move to discipline the few Progressive-Democrats who aren’t sufficiently far Left, pushing them to support ending the Senate’s filibuster.

The Progressive-Democrat “negotiations” in the Senate and the White House that are currently going on are a sham, just Progressive-Democrats filling a square to manufacture campaign talking points.

The Biden Oil Price Spike

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President Joe Biden (D) has killed the Keystone XL Pipeline, is blocking oil production from Federal lands, killed oil production in northern Alaska, is working to kill fracking altogether, is working to kill American oil (and natural gas) production, and has given the go ahead to Russia’s Nord Stream 2 pipeline. In sum, he’s actively working to kill American energy independence.

All of that is driving up American citizens’ energy costs, and that is reflected in the market’s anticipation of spiking oil costs. Here are a couple of graphs illustrating that. They illustrate the expectation that oil will soon cost $100/barrel, after several years of $50-$65/barrel. The first presents the spike since the start of the year in the number of West Texas Intermediate $100/barrel futures contracts against a current $70 price.

This graph reflects the price of a $100/barrel call option on WTI for delivery in December this year and next.

The expectation of actual market pricing of $100 is rising, also, sharply enough to drive up the price of the option.

This is what expert traders (some of whom are trading on the trends themselves and not on underlying oil prices, to be sure) are seeing as the future price of oil for our citizens. Even if oil settles out at its current price of $70 or just a little higher (and the anticipations turn out to be overstated), this current price represents a sharp increase over the last several years, when Government wasn’t moving so zealously to restrict our nation’s oil supply.

This is what Biden has wrought for our nation’s energy supply and cost of energy.