The president now says the Federal Reserve Board is "loco," and "out of control." Moreover, he adds, "I know more than they do."
News flash: The White House does not control the Federal Reserve, whose responsibility is to monitor the economy and try to prevent extreme swings that would endanger the national welfare.
But this president seems to want totally free business and financial markets, with no government influence or interference of any kind. Ever.
Been there, done that, and the result was chaos, rampant in the 19th and early 20th Centuries, with economic crashes that spread poverty and distress not only around the country but around the world.
It was not until 1917 that the Federal Reserve was founded, and not until the Great Depression of the 1930s that government took a more firm hand in regulating business and financial activities.
Before that, big business management showed a penchant for full control of what they do, with no government interference. This included wages and salaries, and treatment of workers. Management preferred government cooperation in controlling things that might interfere with profits, and that included labor costs as well as foreign competition.
If management had treated workers fairly and humanely, there would have no need for labor unions. Taken to extremes, the reaction to unfair treatment leads to widespread strikes and violence. Even worse, this leads to a dictatorship of either a political group favorable to management or another group favorable to workers. In some countries, that's called the proletariat.
At one extreme, then, is suppression of workers by governments supported by corporate management, and at the other extreme, suppression of management.
Somewhere in the middle may be a better system, which would satisfy both sides in the social hierarchy. Put simply, that's what happened in America and in some other countries, avoiding both extremes.
After much conflict, labor and management compromised. Moreover, that spirit of joint effort for the common good of all still prevails, despite occasional eruptions.
One of these eruptions is a move to impose high taxes on goods imported from other nations. These are called tariffs, and are levied as a way to protect domestic producers.
The problem with that, however, is that other countries retaliate, so consumers on both sides suffer as management raises prices to maintain profits. That doesn't last, because soon enough people stop buying.
Result: Economic crash.
It happened after the Smoot-Hawley Tariff Act was signed into law on June 17, 1930, raising U.S. import taxes on more than 20,000 goods.
Along with the stock market crash of the previous October, the combination of higher prices to consumers already suffering from lower wages and fewer jobs led to a worsening of an already harsh economic environment.
If any of this sounds familiar to what's happening now, perhaps it's time to be afraid. Be very afraid.
October 1929 saw a stock market crash. October 1987 saw another Wall Street debacle. This week, the stock market stumbled by more than 800 points on the widely followed Dow Jones Industrial Average.
Is this a harbinger of things to come? Perhaps. Or not.
Such a warning assumes that the stock market is directly related to the economy and is, as some put it, a barometer of economic growth. Others disagree, noting that very few Americans actually own stock, and many of those who do invest their money in mutual funds, rather than in individual companies.
That, however, doesn't stop politicians from blaming others for things that they don't like.
So why is the president criticizing the Fed for its efforts to smooth out radical changes in the economy even though activities on Wall Street stock markets have little directly to do with overall economic growth? Could it be that he wants full control of this, too, overturning nearly one hundred years of efforts to stabilize financial whiplash?
Friday, October 12, 2018
Monday, October 8, 2018
Time and Temperament
If SCOTUS is the media catchword for Supreme Court of the United States, and POTUS stands for President of the United States, would SPOTUS be used for Supreme President of the United States?
A more crucial question then becomes, is that where the nation is heading, and if so, how worried should we be?
But the historic reality is that warnings like this have been sounded before, and the nation has survived.
For example, Franklin Roosevelt, a Democrat, was accused of trying to expand and stack the Supreme Court to stop it from overturning many of his economic recovery programs on constitutional grounds.
And Abraham Lincoln, the first Republican president, was accused of trying to become a dictator.
Between and since, other presidents have been accused of these and many other things, ranging from incompetence to insanity, partly depending on how angry the opposition party was at the time.
The current president is facing many similar criticisms, but whether any are true and whether he will face impeachment and removal from office as well as criminal or civil charges while in office or after he leaves is something that only history can record.
It's no secret that government leaders try to appoint federal judges -- up to and including justices on the Supreme Court -- who will follow the conservative or liberal guidelines preferred by their political parties. But it's also true that members of the Supreme Court, while they may show certain political leanings while on lower court benches, often go in directions unexpected and unanticipated by those who nominate and confirm them.
It's an odd thing to consider, but it seems that once they reach the pinnacle of success in the legal world -- a lifetime seat on the Supreme Court -- they adhere to the ethics of their profession and follow the best principles of the law.
This is not always true, of course, but there have been occasions when a conservative nominated to the Supreme Court by a conservative president moved in a direction unexpected by the president who chose the justice. This reflects a presidential attitude that the chosen nominee will follow the directions indicated by the occupant of the Oval Office.
So far, it has not happened that SCOTUS appointees have bent themselves to the will of POTUS.
It's enough of a problem that members of Congress have played follow the POTUS leader, and have forgotten their constitutional mandate to remain a separate and co-equal branch of government.
However, if SCOTUS falls into the POTUS line, then we may well have a SPOTUS governmental system.
And that smacks too much of a dictatorship.
A more crucial question then becomes, is that where the nation is heading, and if so, how worried should we be?
But the historic reality is that warnings like this have been sounded before, and the nation has survived.
For example, Franklin Roosevelt, a Democrat, was accused of trying to expand and stack the Supreme Court to stop it from overturning many of his economic recovery programs on constitutional grounds.
And Abraham Lincoln, the first Republican president, was accused of trying to become a dictator.
Between and since, other presidents have been accused of these and many other things, ranging from incompetence to insanity, partly depending on how angry the opposition party was at the time.
The current president is facing many similar criticisms, but whether any are true and whether he will face impeachment and removal from office as well as criminal or civil charges while in office or after he leaves is something that only history can record.
It's no secret that government leaders try to appoint federal judges -- up to and including justices on the Supreme Court -- who will follow the conservative or liberal guidelines preferred by their political parties. But it's also true that members of the Supreme Court, while they may show certain political leanings while on lower court benches, often go in directions unexpected and unanticipated by those who nominate and confirm them.
It's an odd thing to consider, but it seems that once they reach the pinnacle of success in the legal world -- a lifetime seat on the Supreme Court -- they adhere to the ethics of their profession and follow the best principles of the law.
This is not always true, of course, but there have been occasions when a conservative nominated to the Supreme Court by a conservative president moved in a direction unexpected by the president who chose the justice. This reflects a presidential attitude that the chosen nominee will follow the directions indicated by the occupant of the Oval Office.
So far, it has not happened that SCOTUS appointees have bent themselves to the will of POTUS.
It's enough of a problem that members of Congress have played follow the POTUS leader, and have forgotten their constitutional mandate to remain a separate and co-equal branch of government.
However, if SCOTUS falls into the POTUS line, then we may well have a SPOTUS governmental system.
And that smacks too much of a dictatorship.
Saturday, October 6, 2018
Capitalism vs Socialism
There are some things that government can and should do, such as road and bridge construction and repair, law enforcement, fire protection, and environmental and pollution control.
This is largely because private enterprise cannot or will not do these things on their own. Why? Because the profit motive is not there. And when it is, the cost to consumers is so outrageous that government steps in to ensure benefits for the population as a whole, not just for the rich.
Otherwise, when the profit motive is strong enough and there is a market for a product or service, private enterprise typically jumps at the opportunity to make a buck. It is free to do so. Or not.
But since the underlying, basic feature of a capitalist system is greed, investors will take advantage and act.
That's one end of the economic spectrum -- unfettered, capitalist free enterprise. At the other end is an economy fully controlled by government with the goal of providing a range of goods and services to all members of society, at minimal cost to them.
So which is better -- totally free enterprise controlled solely by a profit motive with no government interference?
Or an economic system tightly controlled by government, which tells producers what to make, how much to make and for whom to make it?
Or should a society strive for something in the middle, where those with money to invest seek the best return on their capital, but are limited by government rules that prevent them from taking all they can with no concern for the general welfare?
History shows that systems at each extreme don't work for the benefit of all citizens, even though each has some good concepts to contribute to the general welfare. Therefore, a better system would be one that fits somewhere in the middle, borrowing from each system and striving to provide the most benefit for the most people.
Ah, but there's the rub. Where, on what location on the economic spectrum, is the better place to be?
That decision is made often, especially in societies that elect political leaders who follow the wishes of the majority of the electorate and use political influence to nudge an economy in a direction that will benefit all.
This is largely because private enterprise cannot or will not do these things on their own. Why? Because the profit motive is not there. And when it is, the cost to consumers is so outrageous that government steps in to ensure benefits for the population as a whole, not just for the rich.
Otherwise, when the profit motive is strong enough and there is a market for a product or service, private enterprise typically jumps at the opportunity to make a buck. It is free to do so. Or not.
But since the underlying, basic feature of a capitalist system is greed, investors will take advantage and act.
That's one end of the economic spectrum -- unfettered, capitalist free enterprise. At the other end is an economy fully controlled by government with the goal of providing a range of goods and services to all members of society, at minimal cost to them.
So which is better -- totally free enterprise controlled solely by a profit motive with no government interference?
Or an economic system tightly controlled by government, which tells producers what to make, how much to make and for whom to make it?
Or should a society strive for something in the middle, where those with money to invest seek the best return on their capital, but are limited by government rules that prevent them from taking all they can with no concern for the general welfare?
History shows that systems at each extreme don't work for the benefit of all citizens, even though each has some good concepts to contribute to the general welfare. Therefore, a better system would be one that fits somewhere in the middle, borrowing from each system and striving to provide the most benefit for the most people.
Ah, but there's the rub. Where, on what location on the economic spectrum, is the better place to be?
That decision is made often, especially in societies that elect political leaders who follow the wishes of the majority of the electorate and use political influence to nudge an economy in a direction that will benefit all.
Friday, October 5, 2018
Stuff and Nonsense
It's all about stuff.
To borrow a line from the George Carlin school of economics, as suggested by Pug Mahoney, a large part of life is about stuff.
I've got stuff, you've got stuff, everybody's got stuff. If I have more stuff than I need, and you have stuff that I want, let's trade. And if the wants and needs don't match, let's invent money to make trading easier.
That principle works not only on an individual level, but national and international, as well. Technically, economists call money a medium of exchange, or a store of value, among other things. And it doesn't really matter what society uses as money, so long as people accept it and use it.
That's why, when you go to a grocery store and pick out food, then take it to the checkout counter, somebody adds up some numbers and you show some pieces of paper (dollar bills, remember them?) or a piece of plastic that the clerk zaps through a machine and a computer somewhere deducts that amount from your bank account or adds it to the total of what you owe some other company.
Did you see any "real money" -- gold or silver -- change hands? No. Quite a concept, when you think about it.
Meanwhile, on a national level in America, the unemployment is down, total employment is up, total output of goods and services (GDP) is up and the country now has what is likely the longest stretch of economic recovery in its history.
That means the Federal Reserve, which controls the total supply of money in circulation, is likely to increase interest rates again to prevent the growth rate from zooming too fast and thus threatening a sharp downturn. It's what they do. How do they influence interest rates? By controlling the supply of money available. That's basic to the economic law of supply and demand.
Does it work? Over the long haul, probably yes.
Meanwhile, politicians complain that the Fed is holding back further growth. At the same time, they take credit when things are going well, and blame "the other guy" when times are tough.
Reality check: Politicians have only a limited influence on the overall economy, and that's often short-term, at best. And while it's true that government spending can salvage an economy in ruins when consumer spending on goods and services collapses, that concept applies at best when an economy needs outside stimulation. Otherwise, it's better that government stay on the sidelines.
Try telling an ambitious politician to be quiet. Or as Pug Mahoney would put it, politics isn't about getting anything done. It's about getting re-elected.
To borrow a line from the George Carlin school of economics, as suggested by Pug Mahoney, a large part of life is about stuff.
I've got stuff, you've got stuff, everybody's got stuff. If I have more stuff than I need, and you have stuff that I want, let's trade. And if the wants and needs don't match, let's invent money to make trading easier.
That principle works not only on an individual level, but national and international, as well. Technically, economists call money a medium of exchange, or a store of value, among other things. And it doesn't really matter what society uses as money, so long as people accept it and use it.
That's why, when you go to a grocery store and pick out food, then take it to the checkout counter, somebody adds up some numbers and you show some pieces of paper (dollar bills, remember them?) or a piece of plastic that the clerk zaps through a machine and a computer somewhere deducts that amount from your bank account or adds it to the total of what you owe some other company.
Did you see any "real money" -- gold or silver -- change hands? No. Quite a concept, when you think about it.
Meanwhile, on a national level in America, the unemployment is down, total employment is up, total output of goods and services (GDP) is up and the country now has what is likely the longest stretch of economic recovery in its history.
That means the Federal Reserve, which controls the total supply of money in circulation, is likely to increase interest rates again to prevent the growth rate from zooming too fast and thus threatening a sharp downturn. It's what they do. How do they influence interest rates? By controlling the supply of money available. That's basic to the economic law of supply and demand.
Does it work? Over the long haul, probably yes.
Meanwhile, politicians complain that the Fed is holding back further growth. At the same time, they take credit when things are going well, and blame "the other guy" when times are tough.
Reality check: Politicians have only a limited influence on the overall economy, and that's often short-term, at best. And while it's true that government spending can salvage an economy in ruins when consumer spending on goods and services collapses, that concept applies at best when an economy needs outside stimulation. Otherwise, it's better that government stay on the sidelines.
Try telling an ambitious politician to be quiet. Or as Pug Mahoney would put it, politics isn't about getting anything done. It's about getting re-elected.
Wednesday, October 3, 2018
Slander and Candor
If it's true, it's not libel.
It matters not how much lawyers may rant or politicians may deny, if the information as published is true and provably true, it's not libel. Therefore, the best defense against a charge of libel is truth.
When a newspaper prints information about tax fraud, for example, and includes documentation supporting the allegations, politicians and their lawyers can complain all they like about "fake news" and "failing" newspapers.
When the story is backed by fact and evidence, any threat of a lawsuit can be answered with this: "Bring it on, counselor!"
That means the aggrieved person will face deposition and testimony under oath, by subpoena if need be, and subject to the penalties of perjury.
It's one thing to brag, bend the truth, exaggerate and even lie during interviews and public appearances, but judges and prosecutors do not take kindly to liars, especially when civil or criminal charges are strongly supported by "true facts," as lawyers call them.
False facts or even "alternative facts" are of little use in a courtroom. So a politician or any other public figure can deny until daybreak allegations of impropriety, wrongdoing or outright fraud, and the news media will report that too.
In fact, the longer and stronger the denials, the more exposure they get.
If a politician denies the allegations and attacks the allegater every day for a week, that's another seven days that the story sees print and gathers air time. Shrewd public relations advisors often tell their clients to ignore a story they don't like -- true or not -- and soon enough the story will go away as the news media chase other stories.
Journalists run the story as well as the denial. But each time the subject denies the allegation, news media report that, too.
Each and every time, especially when more details are uncovered to support the original allegation.
It matters not how much lawyers may rant or politicians may deny, if the information as published is true and provably true, it's not libel. Therefore, the best defense against a charge of libel is truth.
When a newspaper prints information about tax fraud, for example, and includes documentation supporting the allegations, politicians and their lawyers can complain all they like about "fake news" and "failing" newspapers.
When the story is backed by fact and evidence, any threat of a lawsuit can be answered with this: "Bring it on, counselor!"
That means the aggrieved person will face deposition and testimony under oath, by subpoena if need be, and subject to the penalties of perjury.
It's one thing to brag, bend the truth, exaggerate and even lie during interviews and public appearances, but judges and prosecutors do not take kindly to liars, especially when civil or criminal charges are strongly supported by "true facts," as lawyers call them.
False facts or even "alternative facts" are of little use in a courtroom. So a politician or any other public figure can deny until daybreak allegations of impropriety, wrongdoing or outright fraud, and the news media will report that too.
In fact, the longer and stronger the denials, the more exposure they get.
If a politician denies the allegations and attacks the allegater every day for a week, that's another seven days that the story sees print and gathers air time. Shrewd public relations advisors often tell their clients to ignore a story they don't like -- true or not -- and soon enough the story will go away as the news media chase other stories.
Journalists run the story as well as the denial. But each time the subject denies the allegation, news media report that, too.
Each and every time, especially when more details are uncovered to support the original allegation.
Tuesday, October 2, 2018
Government and Truth
How can you tell when a politician is lying? -- Dinty Ramble
His lips are moving. -- Pug Mahoney
How little times have changed.
Young reporter to editor: "Did you ever get the feeling that a politician is lying to you?"
Editor: "Of course. It happens all the time when you're working two sides of a story and it's clear that one side is lying. Sometimes they both are, but it's not always your job to decide which side is. Your responsibility is to report both sides and let the reader decide who's truthful and who's not."
Ignoring the questions does not make them go away.
News outlets continue to provide information to the public.
It's not a crime to lie to reporters or to the public generally. It is, however, a crime to lie to law enforcement or to Congress.
From the archive, August, 2012
There has been a noticeable change among TV interviewers when dealing with politicians. They remind the subject that he or she did not answer the question, following up with something like, "Are you, or are you not ... ?" This is a good change.
Candidates and elected officials from the president on down talk too much and say too little. Answer the question, please. Say what you have to say briefly and concisely, and move on. Otherwise, you give the impression that you don't really know what you're talking about, and you resort to speaking at length in the hope that an idea will come to you while you're prattling.
Heed the advice of Plato: Do not "return a long-winded harangue to every question, impeding the argument and evading the point, and speaking at such length that most of (your) hearers forget the question." (Protagoras, 336:c-d, Jowett translation)
The strategy of pettifoggery and gobbledygook mixed with bombast may sound good to the base of devoted followers, but to those who listen for intelligent ideas amid all the sound and fury, it prompts the question: How dumb do they think we are? The cynic's reply: Very.
Too often, we get the kind of government we deserve, not the kind we need.
How little times have changed.
His lips are moving. -- Pug Mahoney
How little times have changed.
Young reporter to editor: "Did you ever get the feeling that a politician is lying to you?"
Editor: "Of course. It happens all the time when you're working two sides of a story and it's clear that one side is lying. Sometimes they both are, but it's not always your job to decide which side is. Your responsibility is to report both sides and let the reader decide who's truthful and who's not."
Ignoring the questions does not make them go away.
News outlets continue to provide information to the public.
It's not a crime to lie to reporters or to the public generally. It is, however, a crime to lie to law enforcement or to Congress.
From the archive, August, 2012
There has been a noticeable change among TV interviewers when dealing with politicians. They remind the subject that he or she did not answer the question, following up with something like, "Are you, or are you not ... ?" This is a good change.
Candidates and elected officials from the president on down talk too much and say too little. Answer the question, please. Say what you have to say briefly and concisely, and move on. Otherwise, you give the impression that you don't really know what you're talking about, and you resort to speaking at length in the hope that an idea will come to you while you're prattling.
Heed the advice of Plato: Do not "return a long-winded harangue to every question, impeding the argument and evading the point, and speaking at such length that most of (your) hearers forget the question." (Protagoras, 336:c-d, Jowett translation)
The strategy of pettifoggery and gobbledygook mixed with bombast may sound good to the base of devoted followers, but to those who listen for intelligent ideas amid all the sound and fury, it prompts the question: How dumb do they think we are? The cynic's reply: Very.
Too often, we get the kind of government we deserve, not the kind we need.
How little times have changed.
Sunday, September 30, 2018
Morality and Time
There is no statute of limitations on morality --Pug Mahoney
Boys will be boys, it is often said, to explain naughty behavior by teenagers. And while it may be true that the expression explains their behavior, it does not necessarily excuse it.
To use that as an excuse for bad behavior is at best immoral and at worst it enables those with poor self-control to continue abusing others.
Such behavior is especially unacceptable when perpetrated by those who claim to follow the precepts of a prominent religious organization.
But then again, morality has little to do with religion. Churches may teach morality, along with their version of spirituality, but the two are different.
Spirituality is a person's relationship with a Higher Power, whatever you construe that Higher Power to be. Morality deals with your relationships and attitudes toward other people.
However, this raises the question of whether there is a universal moral code, or does it vary among cultures, just as religion and spirituality vary?
One very popular moral code stipulates that you should not kill. But many followers of this moral code often deem it acceptable to kill others, especially those of a different culture.
Suppose that a ban on killing other people is part of a universal moral code. How, then, to explain why some cultures and those of a particular religious belief system, encourage followers to kill non-believers?
So is this morality or politics? Or neither? Or is this what happens when morality and politics mix, and are rationalized by religion?
When people mix politics and religion, with the approval of their spiritual leaders, morality is forgotten and all kinds of nasty things happen.
Boys will be boys, it is often said, to explain naughty behavior by teenagers. And while it may be true that the expression explains their behavior, it does not necessarily excuse it.
To use that as an excuse for bad behavior is at best immoral and at worst it enables those with poor self-control to continue abusing others.
Such behavior is especially unacceptable when perpetrated by those who claim to follow the precepts of a prominent religious organization.
But then again, morality has little to do with religion. Churches may teach morality, along with their version of spirituality, but the two are different.
Spirituality is a person's relationship with a Higher Power, whatever you construe that Higher Power to be. Morality deals with your relationships and attitudes toward other people.
However, this raises the question of whether there is a universal moral code, or does it vary among cultures, just as religion and spirituality vary?
One very popular moral code stipulates that you should not kill. But many followers of this moral code often deem it acceptable to kill others, especially those of a different culture.
Suppose that a ban on killing other people is part of a universal moral code. How, then, to explain why some cultures and those of a particular religious belief system, encourage followers to kill non-believers?
So is this morality or politics? Or neither? Or is this what happens when morality and politics mix, and are rationalized by religion?
When people mix politics and religion, with the approval of their spiritual leaders, morality is forgotten and all kinds of nasty things happen.
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