Tag Archives: political economy

The Fed, Everybody Else, and Interest Rates

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Will the Fed start raising benchmark interest rates this week? Lots of folks, including folks in the Fed are getting wobbly. I’ve written before about being wobbly in an economy.

Harriet Torry and Jon Hilsenrath, in a Wall Street Journal piece, were careful to point out that central banks raising rates doesn’t work very well:

In the seven years since the world’s central banks responded to the financial crisis by slashing interest rates, more than a dozen banks in the advanced world have tried to raise them again. All have been forced to retreat.

No, they weren’t. They all chose to retreat. That’s the minor point, though. The larger point is a big so what? Those economies named by Torry and Hilsenrath (generally European, Asian, and Australia) aren’t ours. They’re not as large, they’re not structured the way ours is, and none of them have the same imperatives ours does. Their economies, too, are largely influenced by our economy; ours is that large and globally dominant.

That other central banks do this or don’t do that is wholly irrelevant to what our central bank does or doesn’t do. There’s no symmetry here; it really is a one-way street.

Independently of all of that, the Fed has for a number of sound reasons set 2% as its inflation goal, and our economy hasn’t approached that rate in years. If the Fed wants 2%, it’s going to have to let interest rates rise to levels consistent with that inflation rate.

The Fed needs to start raising its rates this week as more or less scheduled. No waffling. No wobbling. No timing the thing. Just do it. Full stop.

Bad Tactics

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On the subject of removing Federal funding from Planned Parenthood, there’s no shortage of bad tactics floating about.

The conservative (note: small “c” conservative) wing of the Republican Party want to shut down the Federal government until they get the President to sign a defunding bill, whether in stand-alone or as part of the Federal budget. Never mind that they have no plan whatsoever for selling the shutdown to the public, they want to have their toddler’s temper tantrum.

On the other side of the question, Senate Majority Leader Mitch McConnell (R, KY) seems excessively timid even to try.

The way you make a law in this country (is) the Congress has to pass it, and the president has to sign it.

The president’s made it very clear he’s not going to sign any bill that includes defunding of Planned Parenthood—so that’s another issue that awaits a new president hopefully with a different point of view.

It may be true that it’ll take a different President to sign a bill that defunds Planned Parenthood. One important step on the path to getting a different President is for Congress to defund Planned Parenthood and force President Barack Obama to veto it. And then use that plain, immoral obstruction to get a decent President elected.

One wing of the Republican Party needs badly to grow up. Another wing of the Republican Party needs just as badly to grow some backbone.

Price Supports

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It seems there’s a glut of milk (among other farm produce) in the European markets, and milk prices are falling.

Milk producers want EU governments to prop up prices by giving more money to farmers who voluntarily cut production.

Social Democrat countries like France, Spain, Portugal, and Italy actually think this is a good idea.

What those good folks carefully decline to discuss, though, is their rationale for requiring consumers to pay artificially higher prices, instead of letting market forces take those prices to an equilibrium empirically agreed between the farmers and the consumers—without government as intervening middleman.

Oh, wait….

More Big Government

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And more interference from that Big Government.

President Barack Obama has signed is going to sign—and do his usual bragging about signing—an Executive Order requiring all government contractors to give their employees paid sick leave.

On top of that,

The White House wouldn’t specify the cost to federal contractors to implement the executive order, which Obama was to address at a major union rally and breakfast in Boston. The Labor Department said any costs would be offset by savings that contractors would see as a result of lower attrition rates and increased worker loyalty, but produced nothing to back that up.

Neither Obama nor Labor Secretary Thomas Perez produced any data to support their bald claim because they don’t have any. Their position is based solely on the arrogance of “We’re Big Government. We Know Best.”

There is, too, that Democratic Party ethos. Perez said

The Republican Party is out of step with similar conservative governments around the world.

Yeah. Someone else is doing it; therefore, it’s the right thing to do. The rightness or wrongness of the thing isn’t at all inherent in the thing. Popularity creates right. I’ll ignore the fact that Perez’ “around the world” is Europe, and that there aren’t any conservative governments in Europe.

It’s certainly true that paid sick leave has merit. However, the decision about paid sick leave is best left in the hands of the employer and his employees and prospective employees. What other countries, what other domestic companies are doing, has nothing to do with it.

It’s not at all true that every good idea must be turned into a government edict that everyone must follow. Including when the costs of this or that good idea will vary from time to time, situation to situation, company to company, industry to industry.

Especially since Americans are fully capable of acting on their own choices. We’re not as stupid as Big Government assumes us to be.

An Excerpt

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…from a VA Office of the Inspector General report.

We substantiated the second allegation that pending ES [Enrollment System] records included entries for individuals reported to be deceased. As of September 2014, more than 307,000 pending ES records, or about 35 percent of all pending records, were for individuals reported as deceased by the Social Security Administration. However, due to data limitations, we could not determine specifically how many pending ES records represent veterans who applied for health care benefits. These conditions occurred because the enrollment program did not effectively define, collect, and manage enrollment data. In addition, VHA lacked adequate procedures to identify date of death information and implement necessary updates to the individual’s status. Unless VHA officials establish effective procedures to identify deceased individuals and accurately update their status, ES will continue to provide unreliable information on the status of applications for veterans seeking enrollment in the VA health care system.

Not only is the VA not trying to take care of our vets—307,000 of them died waiting to get treatment—they’re not even troubling themselves to keep records.

We substantiated the third allegation that employees incorrectly marked unprocessed applications as completed and possibly deleted 10,000 or more transactions from the Workload Reporting and Productivity (WRAP) tool over the past 5 years.

They do, though, go to the effort of covering up their non-performance (I hesitate to say “failure to perform;” that would suggest they’re trying).

And there’s this insulting bit of vapidity from the Under Secretary for Health in response to the IG’s report (the whole letter is at Appendix D of the report at the link. It doesn’t get any better).

We regret the inconvenience and potential hardship place on applicants for health care and we are working hard to restore Veterans’ confidence and trust in VA’s systems and staff. We have and will continue to take timely and appropriate steps to improve our services to ensure we meet the expectations of those whom we have the honor of serving.

Yeah, dying while on the VA’s who gives a patootie wait list is such a potentially inconvenient hardship.

Since the VA doesn’t care, we should honor their lack of interest. Disband the VA, and use the budget dollars that would have gone to the VA in any particular year as vouchers for our veterans which they can find, in that year, their own quality care and decent hospitals.