Fed Should Not Raise Rates for at Least a Year

Janet YellenOver at Fed Watch, Tim Duy made, The Case For September. The issue at hand is whether the Federal Reserve will start raising interest rates in September. As Duy pointed out, there really isn’t much of a reason to do this. But sadly, the Fed knows from long experience, that it doesn’t get blamed for low employment levels, but it does get blamed for even the slightest hint of inflation. It’s a very bad situation where the Fed does not get the proper incentives. Nominally, the Fed is supposed to care as much about employment as it does price stability. In fact, employment takes a distinct backseat to inflation. When inflation is absolutely, positively not a problem, the Fed does what it can about employment. Of course, normally when inflation is not at all a risk, there is very little that the Fed can do for employment. Funny that.

Anyway, Duy pointed out that the big issue here is not that raising interest rates will cause the economy to go back into recession. Rather, it might “lock the economy into a sub-par equilibrium.” I’m not sure that any of these people care about that. That’s another part of the screwed up incentives at the Fed. The people there represent the power elite. Almost half of them are directly appointed by the big banks. They define the common good as being what is good for themselves and their class.

But I would prefer that the Federal Reserve raise interest rates in September. At least if they screw up and do throw the economy into a tailspin, there will be time to fix their mess before the 2016 election. I would rather that the Fed decide that if it doesn’t raise interest rates by the end of this year, that it won’t do it for the first three quarters of 2016. Because we know that if the Fed tanks the economy next year, it will result in President Bush or President Walker or even President Trump.

Since at least 1976, the performance of the US economy for the first nine months of the presidential election year has been the single biggest factor in determining who becomes president. It’s depressing. It doesn’t matter what the cause is. For example, the economic collapse of 2008 was not Bush’s fault, but the fact that he was in power when it happened meant that John McCain had basically no chance of becoming president. Or it worked to liberals’ benefit in that case. But I would hate for the Supreme Court to become overloaded with extremists on the right just because Janet Yellen doesn’t have quite as good a grip on the economy as she thinks she does.

Of course, it is almost inconceivable that the economy will grow enough over the next year that inflation actually becomes a problem. Currently, the employment to population ratio for prime age workers (age 25-54) is 3.2 percentage points below its pre-crisis level. It is 4.8 percentage points below it’s Clinton level peak when the inflation rate was roughly 3%. It is even 3.2 percentage points below its’ Reagan-era peak when the inflation rate was 5%, and people thought that was fine. The the economy is actually still really depressed regardless of what the U-3 rate says.

But the truth is that there aren’t a bunch of unemployed people talking to Yellen and her minions. They are only talking to really rich people who are not happy that bonds aren’t paying as much as they want. And so there is constant pressure on the Fed to raise interest rates, even though clearly, the right thing to do is to wait until after the next election. And maybe that will happen. We’ll see. But Yellen seems to have been itching to raise interest rates for the past year. And the urge only gets stronger.

Greece Ponies Up for Creditors

And a ponyAthens, Greece — A government spokesman today revealed that the Greek government would honor the Troika’s demand that it transfer ownership of specified airports, ports, and other public assets to an independent privatization fund. Moreover, as a gesture of good faith, the government plans to transfer certain additional assets not specifically identified in the Troika’s proposal, notably a two-year old Palomino mare which had previously been the property of the daughter of an unidentified government minister.

“We offer this as a first step toward repairing relations between the government and our partners in the EU,” the spokesman explained. “Greece is committed to delivering on all of its commitments to the international community. And a pony.”

—JEC at Mean Squared Errors
Spokesman: Greece to Go the Extra Mile to Appease Creditors

Chattanooga and that “Terrorism” Word Again

TerrorismBack after Dylann Roof went on his killing spree, I wrote, “Terrorism” Signifies “Us” and “Them,” Nothing More. In it, I reflected on the claim of many fellow liberals — which I’m sympathetic to — that Roof’s murders were acts of terrorism. I hate the word “terrorism.” In modern usage, it means nothing. It is just a signifier to label the violet acts of some people illegitimate while papering over the violent acts of ourselves and those who we think of as being on our side.

So now we have another case that the American media system has no problem calling terrorism: Muhammad Youssef Abdulazeez killed four marines (and wounded three others) at two military installations in Chattanooga, Tennessee. It is hard not to believe that if the perpetrator had been named John Lee Morris, that it wouldn’t be have been call terrorism. And that people wouldn’t be wondering why it was Morris did such a horrible thing. But instead, Abdulazeez did it, he’s a Muslim, there’s no more to talk about it. That’s just the way those people are.

But apart from my general problem with the word and its clear racism, is this a case of terrorism? Glenn Greenwald asked an excellent question about this, The Chattanooga Shootings: Can Attacking Military Sites of a Nation at War be “Terrorism”? In this example, the killing was not indiscriminate. Abdulazeez was killing people in the US military (although he also shot at police who responded to his attacks). That’s not to say that his crimes were any less horrible or that they were justified. It is just to say that his crimes were not indiscriminate and not intending to make the general populace terrorized.

Greenwald provided another, even better example: Martin Couture Rouleau.

Last October in Canada — weeks after the government announced it would bomb Iraq against ISIS — a Muslim man waited for hours in his car in a parking lot until he saw two Canadian soldiers in uniform, and then ran them over, killing one; that was universally denounced as “terrorism” despite his obvious targeting of soldiers.

Again, the issue here is not to claim that these acts are justified. There are all kinds of horrible acts that people commit that are not classified as terrorism. But if the word “terrorism” is to mean anything, then it can’t be applied to just any political violence that we don’t like. But the way that the word is used today, it is even worse than that. It seems to mean nothing more than “violence committed by people with Muslim sounding names.”

This isn’t just about my general regard for words. The use of words have powerful signifying effects on society. By applying “terrorism” only to the acts of Muslims, it tarnishes all Muslims. Nothing could be more clearly racist. No one argued that Dylann Roof’s monstrous act was indicative of his whiteness. Now, I understand, if pressed, people will qualify what Abdulazeez did as the act of a radical Muslim or whatever. But that just highlights the power of words like terrorism. No one thinks about it. It’s a word that is used in an entirely racist manner: people just “know” that a terrorist is a Muslim like they “know” that a welfare queen is black. And these are the assumptions that cripple us as a society.

We Know Why Sandra Bland Is Dead

Sandra BlandSandra Bland, a young African American woman, was pulled over for “improperly signaling a lane change.” The officer then arrested her for assaulting a police officer. She was in jail for three days, and then right before getting out, she apparently hanged herself. I love the “assaulting a police officer” charge. The police commonly brutalize people during arrests, but if they get accidentally slapped in the process: “Police brutality!” But we know it is all nonsense, because the police department put the arresting officer on “administrative duty” because they claim that the arrest was improper.

The question is why did a simple traffic stop turn into an arrest. Bland was not some street kid. She was a college graduate who had recently moved to Texas for a job working at her alma mater, Prairie View A&M University. But she was from Chicago, so maybe she was just too sassy with the officer. In fact, I’m 99% certain that is what happened. The greatest crime in the United State is to not show the police enough respect. And as the police get less and less respectable, they demand this respect more and more. They think they deserve it. I think they deserve unemployment.

Many people don’t accept that Bland killed herself. I don’t have as hard a time accepting this. People who are not used to being in jail have a tendency to freak out about it. And even after three days in jail, it may have simply occurred to the 28 year old Bland that her live was over. Now she would have an arrest and almost certainly a felony on her record. It is quite understandable that she would not see the situation in perceptive. She was, after all, someone who had done everything right: went to college, got a good job. And now this.

What I fear will happen in this case is that the jail video will show that she did in fact kill herself. And that will be the end of it. But that isn’t the end of it. People don’t just end up dead in jail cells. She was there because a wimpy police officer got his fee-fees hurt because the woman from the big city didn’t treat him right. And then, they put her in a badly maintained, under staffed jail where a number of other people have managed to kill themselves without being noticed.

The original sin was with the arresting officer. And he brutalized her. As is seen in a video of the incident, Sandra Bland says, “You just slammed my head into the ground, do you not even care about that?” But of course they don’t care about that. They have bigger issues on their minds. They have egos the size of Manhattan that are fragile as a sickly egg. And if it takes beating up young women and oppressing them into suicide, that’s okay. Because the police must be respected. And young Africans Americans like Sandra Bland don’t matter.


I am not a violent man. And this feeling won’t last. What’s more, I know this is a systemic problem. But right now, I so want to see that police officer publicly whipped. If that happened, it would perhaps have an effect on the systemic problem that is our racist and fear-based policing.

Morning Music: Lynyrd Skynyrd’s Horse

Freebird - Lynyrd SkynyrdI really don’t like the band Lynyrd Skynyrd. Part of it is just that whole southern — draped in the Confederate flag — thing. Certainly, I came down firmly on the other side of their whine fest against Neil Young. But another thing is that I just don’t think that much of them. They are certainly a competent band. But they are highly slappable even without the “southern pride that absolutely positively has nothing to do with racism” nonsense.

I want to discuss “Freebird.” My friend Will cannot pick up a guitar without starting to play “Freebird.” The reason for this is that it is about the only song that he knows. And I hate the song. Lyrically, it’s just pathetic — a man whining about how he needs to be “free.” But what kills it is the music which plods along, “God this song is really boring!” So it really bugs me when Will plays the song.

But I can’t be too down on Will, because he made me laugh a great deal once in reference to “Freebird.” We were listening to a live version of the song. It might be the version that I’ve embedded below. If I had to sum it up, I’d have to say it was: inauthentic. It can’t decide if it’s rock or country. It’s a muddle, and it errs too far into silly country. So it’s almost too much when Ronnie Van Zant croons “I’m as free as a bird now” (5:25 in the video). But then he yells out to the audience, “How ’bout you?!” And Will, without missing a beat, said, “How ’bout your horse?!” It still makes me laugh, because in those four words, Will summed up the pretense of the song and the band.

Anniversary Post: Lizzie Borden

[There is no historical event that calls out to be today. Thus, I’m going to rerun this article I wrote about Lizzie Borden. It’s fun. -FM]

Lizzie BordenOn this day in 1860, Lizzie Borden was born. She is famous not so much for killing her father and step-mother, but for getting away with it. And, of course, the rhyme:

Lizzie Borden took an ax
And gave her mother forty whacks
When she saw what she had done
She gave her father forty-one.

The history of this rhyme is not known, but I’m rather fond of the belief that it was made up by a newspaper seller. You know, like those people you see in the old movies selling papers yelling, “Extra! Extra! Read all about it!” For the record, she gave her step-mother 19 whacks and her father only 11. Whatever else you can say about about Lizzie, she wasn’t excessive!

When I was younger, I really loved the television show Columbo. In those cases, the murderers take such great pains to provide themselves alibis. But in the case of Lizzie Borden, she didn’t much take any pains whatsoever. It was a frightfully planned murder plot. For example, two days after the murders, she was caught burning one of her dresses. Even still, as with the O J Simpson trial, the prosecution and police work was very bad. There are really only two reasons I feel certain she did it: she had a huge and multifaceted motive and she was pretty much the only person who could have done it.

There is one interesting aspect of the trial. They cut off the heads of the victims for use in the trial. Since the trial took place about a year later, the bodies had already been buried. So after the trial, the heads were buried at the foot of each grave. It just seems strange to me that they didn’t dig up the coffins and put the heads back in. I mean, these were extremely rich people.

They were also, not surprisingly, all a pretty vile bunch. Daddy, for example, killed all the pigeons in the barn with an ax, because they were attracting kids to hunt them. Lizzy apparently had built a roost for them and was very upset about him killing the birds. That may have been the ultimate cause (but there was lots of money as a sweetener). As Columbo would tell you, it is always the little things.

Regardless, I think people should stop fretting about whether she really did it. I like this line from Verbal in The Usual Suspects, “To a cop the explanation is never that complicated. It’s always simple. There’s no mystery to the street, no arch criminal behind it all. If you got a dead body and you think his brother did it, you’re gonna find out you’re right.” Regardless, the only other person it could possibly have been would have been the maid and the best motive that anyone has had for her is that she was angry about being told to clean the windows on such a hot day. I’m sure that the maid was used to doing whatever the vile Borden family told her to.

Happy birthday Lizzie Borden — you got away with it!