Is the Federal Reserve nothing but a tool for big banks? According to an op-ed by Sen Bernie Sanders (I-VT), it sure looks that way. The presidential candidate and hero to millions of progressives made the case for an audit, tighter controls, and other measures to rein in the nation’s central banking system.
There are clearly problems with the Fed and it’s very mixed charters to tame inflation, encourage full employment, maintain the value of the US Dollar, and regulate banks. The more presence and power the Fed gains the more this is an important issue. But today’s “progressives” aren’t in a mood for just reform – many are in a mood to “End the Fed!”
While that position is understandable it’s horribly misguided. But it’s a great highlight for the tension inherent in not-that-subtle difference between a “liberal” and a “progressive”. And it’s ultimately a rather irresponsible position that Sanders is taking.
Tax reform is on the minds of many Republican candidates, and that’s a good thing. Donald Trump revealed a plan, suggesting he may be a serious candidate after all. This announcement came as his poll numbers were slipping, so we may have a hint what voters think about actual policies. Jeb Bush released his plan earlier this month with the distinction of being called “weird”.
The point is that we are talking about taxes and serious tax reform, which is good. No one should expect one plan to suddenly spring forward and cut through the elaborate mess we have. Then again, once the knife is out, you could carve a better tax code out of a banana. But what really is needed? What is “simplification” or “reform”? Let’s start at the beginning.
As is so often the case today, bad news is good news. Sen. Elizabeth Warren (D-MA) had a terrible loss when an important provision of the Dodd-Frank financial reform was weakened over her very vocal objections, slipped into the critical budget deal when no one was supposed to be looking. But if you read the press, it was good for her because it increased her stature at a time when calls for her to run for President are only getting louder.
There are now two prominent calls for her to run, one by MoveOn and another independent one pushed by a group of major Obama backers. A true hero usually heeds the third call. The way the press is writing her story, that’s about to come. What does it all mean?
“How good it is for us when the Lord unsettles our lukewarm and superficial lives.”
– Pope Francis, tweeting as @Pontifex, 7 April 2014
Palm Sunday is the start of Holy Week. This is the day Jesus rode into Jerusalem on a humble donkey, a hero to the adoring crowds. His subsequent challenge to the authorities who were jealous of his popularity got him tortured to death in just five days. It is a day meant for this new People’s Pope, now with a full year under the simple skull cap (or yarmulke) he is usually wears in public in place of the pointy miter of authority. But this Holy Week is a special one, and not just for this pope’s anniversary.
One week after the Easter celebration of resurrection Popes John XXII and John Paul II will be canonized as saints, recognizing their work as reformers of the Church to be the hand of God himself. They make a formidable pair, one more liberal and the other more conservative. Together, along with Francis’ year of tumult, this event will probably mark the start of a major leap for reform and reinvigoration of the Church. This is a good day to question authority and the “superficial lives” that coast along in need of renewal, and Pope Francis appears to have a plan.
Barataria has noted before that there are three great forces weighing on the economy today: business cycles, globalization, and demographics (the retirement of the Baby Boom, already starting). Business cycles don’t last forever, and this particularly destructive one should end about the same time the heart of the Baby Boom starts to retire in 2018. The latter is a genuinely double-edged sword, providing opportunities for young people to fill the jobs that open as the burden of retirees on public assistance grows. There is still the potential for a great period of economic expansion in the 2020s if we can manage the downside effectively.
As with everything in economics, a growing economy makes everything easier. But how can we grow the economy through this period if there is a shortage of workers? The missing part of this Managed Depression is, as always, the important policy changes that will set us up for the next economy once this phase of the business cycle is over. One part of this pending in Congress, held up by partisanship, is immigration reform.
In other words, the challenges of globalism present one solution to the challenges of demographics.