Relevant and even prescient commentary on news, politics and the economy.

Recycling is Broken

Lloyd Alter at treehuggers: The only thing that really works for recycling is full producer responsibility. If a producer sells a product, the container is theirs and the contents belong to the customer. This is how it used to work with beer, pop, milk, water for the water cooler. It is what consumers and producers have to get back to achieve zero waste and a circular economy.

California has a long history of calling for deposits on both PET plastic, aluminum, and bottles under the California Redemption Value (CRV). At one time the recycler ePlanet had 600 facilities collecting drop off recyclables throughout California where people could get their deposits back.

On August 5, ePlanet closed down the remaining 284 recycling plants laying off 700 workers. In a statement:

With the continued reduction in state fees, decreased pricing of recycled aluminum and PET (polyethylene terephthalate) plastic, and the rise in operating costs from minimum wage requirements, required health and workers compensation insurance; ePlanet has concluded the operation of these recycling centers and supporting operations is no longer sustainable.”

A three-month investigation by Consumer Watchdog found the reason for the failing California recycling system which left consumers fewer options each year on where to redeem their empties. It also found special interests such as grocery chains, beverage distributors, and trash haulers could get rich at the consumer’s expense.

Besides the closures limiting where to take recyclables, grocery and big box stores are not taking back empties either in spite of a law requiring them to do so. Accounting scams by retailers such as Walmart and also beverage distributors are prevalent. They undercount the paid deposits for each item they sell and by under reporting they keep the difference.

Over the last five years CalRecycle (state agency) which oversees California’s beverage container recycling program has not publicly imposed a fine on distributors scamming the system or retailers not taking recyclables back. CalRecycle has purposely accumulated an ~$300 million reserve as of 2018 rather than disburse the funds to recycle centers to help them survive.

The commercial fraud and state agency issues need to be resolved.

Also troubling the industry today is the availability of less costly virgin material. Virgin PET is cheaper than cost of cleaning and processing of recycled material which is due to the abundance of natural gas. There is also an abundance of recyclable aluminum in the market today which has driven prices down. Prices have dropped from “75 cents per pound last year to 55 cents, the lowest it has been since 2009.” Since the golden-haired child in the White House has imposed tariffs on China, the Chinese have imposed tariffs on US scrap imports which is part of the reason for the low prices created by a growing US glut. Lower price results in increased recycling costs for consumers today and especially in rural areas. Then too with the price drop I would think US manufacturers could use recyclable material more readily than virgin material. It is just a matter of making them do so.

The results of a failed recycling system scream for a solution and one which product and package manufacturers will not like. If product manufacturers want to use aluminum and plastic for packaging their products such as soda, water, etc. than they have to take it back and work with the packaging manufacturers to recycle it into more packaging or other uses. Today, the packaging does not go back to the user of the packaging, the product manufacturers, and is recycled outside of their responsibility. This enables them to side step the responsibility.

We have to go beyond a circular economy and get rid of single-use plastics entirely. It is clearer every day that passes the US never had a real recycling system. It was just a very long linear onegoing from the producer through our homes to China.

treehugger’s Lloyd Alter “Today’s recycling is BS.”

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Another Nail in the Coffin of Democracy and Journalism

Commom Dreams, Jake Johnson, August 6th, GateHouse Media announced it will purchase Gannett (USA Today, Detroit Free Press, Indianapolis Star, and other major American newspapers). GateHouse Media publishes 144 daily newspapers, 684 community publications, and over 569 local-market websites in 38 states.

If approved the result will be a $1.4 billion news conglomerate. Common Cause stated a “combined GateHouse-Gannett entity would own one in every six newspapers in the nation and control over 100 local news operations.” While the media giants touted their commitment to “journalistic excellence” in a press release, the merger announcement comes with plans for $300 million in annual budget cuts.

A study by the University of North Carolina confirmed the U.S. has lost almost 1,800 local newspapers since 2004. Newsroom employment fell by a quarter from 2008 to 2018 (Pew Research) and layoffs have continued this year.

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“4 out of 5 mass Shooters Were Not Diagnosed with Mental Iillness,

half showed no signs of a prior, undiagnosed illness.” Sen. Chris Murphy (D-CT), and plainly speaking, they were not mentally ill.

Yesterday on Monday morning;

President Trump: “Mental illness and hatred pulls the trigger, not the gun. We must reform our mental health laws to better identify mentally disturbed individuals who may commit acts of violence and make sure those people not only get treatment and if necessary, involuntary confinement.” This is coming from a narcistic man who behaves irradicably and irrationally.

In response to President Trump’s remarks, Senator Chris Murphy (D-CT).

“Nineteen of 20 murderers had no diagnosis of a mental illness. Four out of 5 mass shooters had no mental illness diagnosis, and half showed no signs of a prior, undiagnosed illness. Framing mass shootings as just a mental illness problem is a gun industry trope. Period. Stop.”

In any case, the courts make little allowance for mental illness or for those who plead insanity. Those who are mentally ill and convicted of felony are locked away at level 4 prisons with the general population and the treatment is minimal. Trump’s “lock them up” comment of involuntary confinement just takes it one step further than the courts and without their interference.

Back to Senator Murphy and social media comments: some commenters agreed with Senator Murphy’s point about the validity of linking such events to mental illness as these comments only serve to stigmatize anyone with a mental illness. Other commenters questioned whether it is possible for a person to kill multiple strangers, at random, and not be mentally ill. One Twitter commenter; “So a healthy person does this?”

Yes, it can be a healthy normal person more often than not.

A much-cited 2016 review by forensic psychiatrists James L. Knoll IV MD and George D. Annas MD, SUNY Upstate Medical University in Syracuse New York may have been what Senator Murphy was referencing to in his comments.

Both doctors Knoll and Annas acknowledged the public and the media find the question of “mental illness” hard to resist.

“After all, who but a madman would execute innocent people in broad daylight, while planning to commit suicide or waiting to be killed by police?”

Adding to Knoll and Annas’s findings as well as other research; only a “minority” of mass shootings (however defined) have been perpetrated by individuals having recognized mental disorders.

“Few perpetrators of mass shootings have had verified histories of being in psychiatric treatment for serious mental illness.”

Again Knoll and Annas: Such individuals can function (perhaps marginally) in society and do not typically seek out mental health treatment. In most cases, it cannot fairly be said that a perpetrator ‘fell through the cracks’ of the mental health system. Rather, these individuals typically plan their actions well outside the awareness of mental health professionals.”

Mass shooters may not meet the criteria of a disorder as stated in DSM-5 – “Diagnostic and Statistical Manual of Mental Disorders.” They may have an ill-defined trouble of the mind, harboring anger or revenge and for which the field of mental health field has no immediate, quick-acting ‘treatment. “Psychiatrists and in particular forensic psychiatrists understand that dark and depraved acts are frequently committed for other reasons besides mental illness and more often committed for those other reasons.”

Can the matter of a hidden anger or other undefined trouble be resolved by labeling it ‘mental illness’ and calling for greater scrutiny of ‘troubled’ individuals? Knoll believes we would solve nothing by doing so and even risk making matters worse. This mindset makes us vulnerable to creating new and misguided laws. Such attempts further the medieval notion of equating mental illness with ‘evil’ or criminal behavior.

Mental health treatment has its limits is not designed to detect and uncover potential violent extremists. Formal psychiatric screening is not likely to identify those who may commit massacres.

Noting the wave of mass shootings beginning in the late 1990s; there was another propellant besides guns and mental illness both of which existed for a long time, and to which Knoll added the media as another. “It seems difficult to deny that the media coverage since the late 90s” has made it certain that those who commit heinous crimes become celebrities through the development of an online “Columbiner culture” glorifying the Columbine High School shooters and the others following in their footsteps.

We must eliminate the media attention gained from mass shooting.

Conundrum: Why Isn’t Killing 22 People ‘Mental Illness’?” — Psychiatrists say the question is beside the point, MedPage Today, John Gever, Managing Editor, August 5, 2019

Mass Shootings and Mental Illness,” Gun Violence and Mental Illness. James L. Knoll M.D. and George D. Annas M.D.

The Health 202: Trump blamed mental illness for mass shootings. The reality is more complicated” The Washington Post, Paige Winfield Cunningham

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Enforcing the Constitution

I have met this man on several occasions. He is one of the most unimposing and quiet people I have ever run across. You would never know he is one of the most knowledgeable and capable constitutional attorneys in the nation having testified to Congress on SCOTUS appointments.

Erwin Chemerinsky: In Marbury vs. Madison, in 1803, the Supreme Court declared that it is “the province and duty of the judicial department to say what the law is.”Quoting Chief Justice John Marshall from Marbury vs. Madison (1803) footnote 742, the Court declared:

“It is emphatically the province and duty of the judicial department to say what the law is. Those who apply the rule to particular cases, must of necessity expound and interpret that rule. If two laws conflict with each other, the courts must decide on the operation of each.”

Justice Elena Kagan in minority dissent:

Justice Elena Kagan wrote: “For the first time ever, this Court refuses to remedy a constitutional violation because it thinks the task beyond judicial capabilities. And not just any constitutional violation. The partisan gerrymanders in these cases deprived citizens of the most fundamental of their constitutional rights: the rights to participate equally in the political process, to join with others to advance political beliefs, and to choose their political representatives. In so doing, the partisan gerrymanders here debased and dishonored our democracy, turning upside-down the core American idea that all governmental power derives from the people.”

The Supreme Court just abdicated its most important role: enforcing the Constitution

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Making Political Fun of the President

Donald Trump addressed a rightwing crowd (Turning Point USA) in Washington on Tuesday. The audience roared in support of the president standing in front of the Presidential Seal. Now take a close look at the seal. It had been doctored to include a two-headed eagle – the same as the Russian seal and in place of arrows in one of the eagle’ talons – there was golf clubs.

Click on the image for better detail.

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Tomorrow

Everyone is waiting for tomorrow to see what Mueller will tell the House. I am going to say it will be nothing other than what has already been said verbally. No one is going to read the text version and see what was really said by Mueller. Only a few of us will and I have yet to find a place to place it in my bathroom.

In Michigan in May, Congressional Representative Justin Amash had a townhall in his district to explain why he called for the impeachment of DTrump. He did not call it to first explain why he supported Trump or to say I was mistaken in giving him my support since he took office. He absolved himself of the responsibility of doing so and he marched to the same tune as the rest of the House Republicans. Instead Justin arrived at his support of the impeachment of Trump after reading the 448 page Mueller report.

Setting politics aside many of us already knew Trump was not fit for office based upon his past, his actions, and his lies. We saw through Trump and recognized what he was. After reading Special Counsel Robert Mueller’s 448-page report on Russian interference in the 2016 election and possible obstruction of justice by the president, Congressman Justin Amash finally saw the light.

As the Atlantic explains, one person in the crowd just found out.

“As far as she was aware, Trump had been totally exonerated.

Cathy Garnaat, ‘I was surprised to hear there was anything negative in the Mueller report at all about President Trump. I hadn’t heard that before. (A Republican who supported Amash and Trump, told NBC that night.) ‘I’ve mainly listened to conservative news and I hadn’t heard anything negative about that report, and President Trump has been exonerated.'”

I am not sure what Congressman Justin Amash’s excuse was for not knowing Trump was not fit (being kind here) for office. He could not see it himself and he marched right along with the rest of them until he was told by someone else Trump was unfit.

Tomorrow morning when Mueller is scheduled to testify publicly before the House Judiciary Committee and the House Intelligence Committee, Ms. Garnaat’s words will be worth considering as they represent a purposeful perception gap by the public. A tidy summary of how Americans may have navigated the time gap successfully between the 4-page Barr commentary on the Mueller report and the report itself. Her short statement underscores how successful Attorney General William Barr exploited the space of time between his release of the 448 page report as compared to his 4-page short brief of what the Mueller report said, harnessing the power of television to set his version of the narrative of the report, and knowing most people were unlikely to read it themselves and have that “aah huh” moment. Why read the book when one can read the cliff-notes? There is no test of citizenry knowledge of current events to be passed here.

The challenge faced by Democrats tomorrow’s attempt is to make Mueller’s words resonate more forcefully then Barr’s 4-page summary in an era defined by the brevity of the laws of entertainment. Mueller’s testimony if it does call out Trump may have missed the moment. Of course many of us claim, the moon landing was done in a Hollywood studio. Perhaps, I will be mistaken and much more will come out of this?

As far as Amash, he is saving his ass and he should have known better well before Mueller’s report.

Bill Barr Already Won The Atlantic, Elaina Plott, July 23, 2019

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A Voice from England

Trevor and I worked together on the supply of antennae for keyless go automobiles including Chrysler, Mercedes, BMW, Skoda, etc. I had met him while working in Germany as the Purchasing Manager for North America. He was representing a German/Czech company.

I spent time traveling around Germany, Switzerland, and the Czech Republic. Partook of Czech Budweiser beer which is many steps up from the American version. We have been exchanging words on the situations and conditions in England, Europe, and the US. It sounds as bad as the US; although, I would like to think we are far worse than what Europe is experiencing. This exchange was started with a short comment I made on Facebook:

A few racist remarks by the Pres and suddenly the imprisonment of immigrants seeking asylum from violence in their homelands is forgotten along with the poor conditions under which they are being held.

The squad of four is tough enough to take the abuse. They have heard worse. We should be angry at Republicans and Trump’s purposeful comments in an attempt to deflect our attention from the crisis on the southern border and his continued abuse of people.

Bill,

We live in scary times, some comments by your President and our possible new Prime Minister seem to echo the 1930’s in Europe!

Trevor,

My English associate, I am sure you and your country men and women will rid yourselves of Boris as soon as you can do so. For us, it is a bit more difficult as we have actors of democracy placing party and politics above country and the general welfare of this country. We do not make much of a safe or dependable ally in the world today either.

Bill,

I sincerely hope so, I see too many parallels with the rise of Hitler in our current European political environment, calling for sovereignty and blaming immigrants for the ills of a nation are not the way forward. But this kind of rhetoric appeals to the less thoughtful amongst us. I listen to people telling us that the UK must leave the European Community because of their control over us, but 95% of the legislation put before the European Parliament during the last 5 years was voted through with very close to total support of the UK MEP’s. I am watching the most divisive split of the UK driven by the media and a few MP’s who appear to be stupid. It is just unbelievable, you could not make it up. Then we have Trump who appears capable of gross stupidity, and has crowds cheering him and chanting for democratically elected senators to be sent home! It is all very scary!

I trust you are well!

Trevor,

I have been reading and watching. This is highly unusual for Europe in this age. Hungary appears to be off the rails also with Orbán as is Poland too. Radicals have also reappeared in Germany, And the US has its blood and soil marchers who are further radicalized by the stupid remarks of our President. Politicians of his party are condoning his racist hatred which empowers and mobilizes others to do stupid things. It has gone beyond verbalization.

Yes, yes, blame the poor and the weak, the different culture and color, who come to America having other languages and looking for safe haven amongst us. Instead they are portrayed as a class level lower than the poorest of the white American, taking advantage of our economy. This has kept the population from concentrating on the disproportionate, and growing, distribution of wealth and income in the US. For the lower white class, an allowed luxury, a place in the hierarchy and a sure form of self esteem insurance.

The political economics of it have certainly led to bad and violent reactions towards immigrants. We are not a small country. At the most only 10% of our land mass is occupied. New people keeps our median age lower, which is good for labor, and most have assimilated into society over the generations.

I am hoping with “a little patience, we shall see the reign of witches pass over, their spells dissolve, and the people, recovering their true sight, restore their government to its true principles (Jefferson).”

This bastard occupying our presidency must go.

Perhaps a couple of more Budweisers in Prachatice to dull our thought on the current events????

Bill,

I wrote this to a Brexiteer friend who I just cannot believe fails to see the reality.

Yes a difficult area as the public are not fully informed, however, there is already far too much anti immigration feeling in this country, it is clear that without immigrants our NHS would not function. The media has a great deal to answer for, during the last 20 plus years they have printed distortions and blatantly biased articles against immigrants, and indeed against the EU.

The rise of the likes of Farage and Trump with their, in my view distorted views of the world, claiming they only want to reclaim their countries for the people is dangerous rhetoric, I thought that with the end of the Second World War we had moved on from demonizing and blaming particular races of people for damaging a country.

Indeed there is the moral dilemma of ensuring that we do not create poverty, but our current crop of politicians has spent and is indeed spending multiple millions of our tax money on foolhardy adventures, HS2, PFI and yes Brexit. These same politicians, whilst cosseted in their parliamentary roles have made costly decision after costly decision without a care for those in genuine need.

Universal Credit is an absolute fiasco, it is causing immense levels of poverty for both indigenous British people and immigrant alike, just look at the rise in food bank use, also consider the absolutely appalling numbers of children living in poverty. The claims of children unable to go to school as they have no shoes are true, just ask my daughter who works for a charity.

I am no socialist or indeed liberal, I believe in freedom for the individual to make the best of their lives, I also believe in the free market. But, and this is a big but, I also believe in helping those in genuine need, the low paid workers who contribute much to society for little reward. For example those earning the UK minimum wage who are trying to feed and house themselves.

So I do not believe in squandering tax £’s on vanity projects, or things like PFI, or as I said earlier Brexit, the bill to date on this alone is in excess of £900 million in the last financial year, with 5,000 civil servants diverted from their real jobs and numerous fat cat consultants from the big four consultancy practices creaming £ millions of Tax £’s. All whilst the self-serving egotistical politicians argue amongst themselves about a deal that needs to be agreed by 27 other countries.

You can tell that I feel very strongly about the situation to which the media has misled us, I am ashamed of my country when I see homeless people on the streets, and when I see the use of food banks increasing on a daily basis, and when I hear that we have staggering numbers of children living in poverty. This is supposed to be the 5th largest economy in the World, but our politicians are squandering our Tax pounds without a care for their country.

Me: I do not believe in mislaying the people I get to know while traveling. We have issues globally and similar concerns by the sane.

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House’s SECURE Act and the Senate’s RESA Act

Congress has been busily working on a much-needed way to improve Middle Class savings and growth over the span of their employment to boost their retirement.

Dueling bills to restructure IRAs and 401ks appear to be redundant. Better known as the “Setting Every Community Up for Retirement Act” (SECURE Act) H.R.1994 and the Senate has a similar bill, the “Retirement Enhancements and Savings Act” S.792 (RESA). Both bills were passed with bipartisan support.

For the ultra rich? A major outcome of the Trump tax bill were tax breaks for the wealthy and corporations. Besides much of the resulting income increases going to 1% of the household taxpayers, the same 1% were given the ability to shelter large amounts of income in gifts to their heirs. It is a great time to be rich in income and have the ability to shelter it by making gifts of it to your heirs’ tax free!

A little history on why Congress might take this up

From 1979 to 2017, the average annual income for the 1% of the household taxpayers has increased 156%, the top 1 hundredth of 1% income increased 343%, and the average American’s income did not increase at all. In spite of increased education from 1970 when half of Americans 25 years and older had a high school degree compared to today when the proportion of Americans having a college degree tripled, income has been stagnant for much of America. Even with the increased education, as Nick Hanauer in a recent Atlantic on this topic stated, the “Education is Not Enough” or was not enough to build, to build a vibrant middle class. Nick is also reiterating what Tom Hertz said in 2006 in his article; “Understanding Mobility in America.”

“The first aspect is the question of intergenerational mobility, or the degree to which the economic success of children is independent of the economic status of their parents. The second aspect is the short-term question of the amount by which family incomes change from year to year. One very clear conclusion is children from low-income families have only a 1 percent chance of reaching the top 5 percent of the income distribution versus children of the rich who have about a 22 percent chance.”

All the education in the world may not make a bit of difference in upward mobility as Nick and Tom Hertz concluded unless the income and the status is already there. A successful middle class with good income has to be present.

What Congress is doing.

The House passed the SECURE Act with an almost unanimous bipartisan 2nd vote. Prior to the first vote, Republican NC Representative Patrick McHenry made a motion for an affirmative vote (page H4147) stating they stand together against the anti-Semitic BDS movement. How this applies to the average citizen’s IRA is beyond me. It is a tagalong to the SECURE Act with the hope it would pass. It lost with 222 in opposition.

A few things about the House “Setting Every Community Up for Retirement Act (SECURE).

• It lengthens the amount of time a person can contribute to an IRA beyond 70.5 years of age.
• Raised the required minimum distribution (RMD) age to 72 from 70 1/2 years old.
• Increased the Safe Harbor percent from 10 to 15%.
• Allowed long-term, part-time employees to contribute.
• Put in place an small employer tax credit for enrollment.
• Revised how benefits are paid out to a non spousal from 5 to 10 years (page H4234).
• Allowed automatic enrollment.
• Etc.

“The House SECURE Act would eliminate the current rules allowing non-spousal IRA beneficiaries to use (stretch IRA) minimum distributions (RMDs) from an inherited account over their own lifetime (and potentially allow the funds to grow for decades). With the SECURE Act, all funds from an inherited IRA would have to be distributed to non spousal beneficiaries within 10 years of the IRA owner’s death (The rule would apply to inherited funds in a 401(k) account or other defined contribution plan, too.).”

Other than the elimination of the Stretch IRA, these changes were needed and they will improve the amounts accumulated for retirement. As I mentioned earlier, much of America has not incurred the same income increases as the 1% or the 1 tenth of 1% of the household taxpayers. Pre-inflation YOY income growth for non supervisory Labor has been ~3%. Subtract out inflation of 2% and income has grown by 1% for much of America not leaving a lot to put into a 401k. I am waiting for the next shoe to drop of increasing the age of when people can take SS.

The Senate RESA bill is similar in content except for a provision buried in it taking aim at the Middle Class. The Senate’s RESA Act shortens the time period for non-spousal beneficiary withdrawal who have inherited an IRA with greater than $400,000 (IRA, Roth IRA or 401k). RESA exempts the first $400,000 inherited to a life time of RMD withdrawals and then it forces beneficiaries to cash out over a 5-year period any amount greater than $400,000. It could have tax implications if the amount over $400,000 was large or one’s income tax bracket was high.

As one reader pointed out, many people with 401Ks have less than $400,000 in their accounts when they retire. Then too with little growth in income occurring (mentioned earlier), one can see why people are not saving for retirement and why there is less in their 401ks.

Under today’s Stretch IRA rules, heirs of IRA owners were allowed to extend the taxable distributions of an inherited IRA over their lifetime, hence being called “stretch IRAs.” The proposed Senate bill labeled RESA—allows $400,000 of aggregated IRAs to stretch per beneficiary, but chops the cash-out period down to five years for the balance greater than $400,000.

What are the implications in the Senate bill? As I said it affects non spousal beneficiaries of the heads of families who have accumulated money greater than $400,000 over their lifetime to pass on as inheritance to their families. Non-spousal beneficiaries on inheriting sums of money greater than $400,000 could have a substance portion of the inheritance taxed by Uncle Sam and also end up in a higher tax bracket as a result. Ok, I said it enough times.

Similar would hold true for the House bill which eliminates the stretch IRA, does not have an exemption for 400,000 of inheritance, and forces a beneficiary to use up inheritance funds in 10 years rather than a lifetime or RESA’s 5 years. The proposed Acts do not impact spousal beneficiaries or minor children named as beneficiaries until pf a majority age, children with disabilities, etc.

The forced 5 year annual distribution of these savings and retirement plans by beneficiaries is the primary revenue vehicle (taxes) of RESA. Senate Finance Committee Chairman Chuck Grassley, (R-Iowa), who proposed the bill, said on the Senate floor recently that the RESA bill “is paid for” by this provision (as he takes his agricultural benefits resulting from tariffs).

No worries for the 1 percenters.

Back to the 1-percenters, Trump’s Tax Overhaul law doubles the estate-tax exemption to $22 million a couple and possibly avoiding taxes in dynasty trusts. The new law doubles the amount that can be passed to heirs without worrying about estate and gift taxes, to about $22 million for a married couple (redundant, I know). But the thresholds are in place only until 2025, and the ultra-rich are turning to a key tool — the dynasty trust — to secure the financial futures of their children, grandchildren, great-grandchildren, and beyond.

Assured wealth and income giving descendants a place on the ladder of mobility as being necessary to move upwards on that same ladder by Tom Hertz and Nick Hanaeur.

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Protecting The Fed

Mark Thoma has a post up on Facebook. Apparently, Trump intends to nominate Dr. Judy Shelton to the Fed. I knew Trump was bat-sh*t crazy and now he has confirmed he is bat-sh*t stupid too (if you did not already know this). It is hard to know which is worse as they come in a daily stream of excesses.

I do not necessarily agree with my former Econ Prof (not Mark) from time to time; but, he does have a deeper knowledge on the topic than I, to which I listen even though the politics of it may differ from mine. I do get the impression he is deeply concerned as is Mark Thoma and disappointed with the present administration and their impact on the nation, its financial status, and the economy.

Dr. Judy: “How can a dozen … people meeting eight times a year decide what the cost of capital should be versus some kind of organically, market supply determined rate? The Fed is not omniscient. They don’t know what the right rate should be. How could anyone?

Given the alternatives of Congress or the President determining national economic policy, I would stick with the dozen. I can figure out what they are doing. Crazy and/or political people are off the books. I will not get too deep into this as you can read the article “Protecting the Federal Reserve” at Money Banking yourself. Some of Judge Judy (first thought which came to mind), er Dr. Judy’s thoughts:

– “Following the 2007-2009 recession, during the weakest post-WWII recovery on record, with inflation below the Federal Reserve’s stated target, she argued against ‘suppression of interest rates’ (see quote above). By contrast, despite the lowest unemployment rate since the 1960s, in recent weeks she has argued for cutting rates ‘as expeditiously as possible.‘ This apparent willingness to pander to President Trump’s preferences, rather than setting policy to meet the Federal Reserve’s longer-term goals of stable prices and maximum sustainable employment, would diminish the Fed’s independence,”

No comment on my part as either action has a negative reaction given the environment.

– Dr. Judy “argued for replacing the Federal Reserve’s inflation-targeting regime with a gold standard, along with a global fixed-exchange rate regime. In our view, this too would seriously undermine the welfare of nearly all Americans.”

– “Should Dr. Shelton become a member of the Board, and should President Trump win re-election in 2020, there is a chance that she could become the Chair of the Federal Reserve when Chairman Powell’s term ends in 2021. Given her unsuitability for the Board, making her Chair would seriously undermine Fed independence.”

– Dr. Shelton has proposed eliminating the Fed’s key tool (in a world of abundant reserves) for controlling interest rates—the payment of interest on reserves (for a description of the Fed’s current operating regime, see here). She argues that the Fed doesn’t know what the correct interest rate is (see citation). But that ignores the constant learning process—based on observations about the state of the economy and financial conditions—that allows the Fed to make rapid policy corrections to achieve price and economic stability. U.S. central bankers are credibly committed to their legal mandate to promote “maximum employment, stable prices, and moderate long-term interest rates.”

I do not Tweet, I do not read Tweets as they are the lowest form of communication outside of a belch. Trump tweeted his intention to nominate Dr. Judy Shelton to the Board of Governors of the Federal Reserve System.

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