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 11 
 on: Today at 09:12:40 PM 
Started by Crafty_Dog - Last post by Crafty_Dog


The Fed’s Massive Power Grab

Take your pick of these two jobs. You get to manage a $4+ trillion bond portfolio and have omnipotent control over banks and other financial institutions. Or, you can manage an $800 billion portfolio, control the level of the federal funds rate and manage some regulatory issues. Is this really a hard choice? Well, it certainly doesn’t seem to be for the Federal Reserve.

The Fed has seamlessly morphed from an institution that occasionally intervened in financial markets to a monster that apparently wants to control a great deal of the US financial system. Federal Reserve Board Chair, Janet Yellen, and her fellow central bankers, with virtually no pushback from Congress, are in the process of adopting an entirely new economic management technique called “macroprudential regulation.”

The definition of macroprudential regulation is hard to pin down. In short, it means managing systemic risks. This is done by regulating specific financial system behavior in an attempt to avoid cascading economic problems. The idea is that the Fed can reduce the risks of financial instability for the economy as a whole by regulating certain behaviors.

In practice, what this really means is that the Fed wants to run a monetary policy that it believes is appropriate for the economy as a whole – to keep unemployment low. But, if this overall monetary policy causes too much financial risk, the Fed wants to micro-manage that risk by deeming it a macro-risk. At its root, this is hypocritical.

Everyone knows that when the Fed holds rates too low, this encourages some investors to leverage up more than they would otherwise. For example, in 2004-05, the Fed held the federal funds rate at 1% which helped cause a bubble in housing. But, rather than raising rates at that point, the Fed wants to have the right to regulate home lending activity. It could do this in any number of ways, by raising the capital required by banks to make home loans or possibly putting a limit directly on certain types of loans. That’s macroprudential regulation.

In effect – and the Fed has argued this – the Fed blames banks for bubbles, not its strategy of holding interest rates artificially low. This is central planning to the second degree. The Fed wants to set rates first and then police the impact of those rates as if these decisions are not related.

This is a very dangerous precedent and it moves the US away from the free market while continuing to concentrate the power in the hands of the Fed. In a true free market, monetary policy should not be used to manage the economy. Rather, monetary policy should have one goal – to keep the value of the currency stable.

Unfortunately, as is true with all government institutions, the Fed is always looking to expand its influence and power. Remember when Rahm Emmanuel said, “never let a crisis go to waste.”? The Fed has taken this to heart. In the thirty years, between 1977 and 2007, its balance sheet (the monetary base) averaged 5.4% of US GDP. Today, it’s 22.4%.  (!!!!!!!!!!!!!!!!!!!!!!!!)  Never, in the history of the United States, outside of the military in World War II, has one government institution been so dominant.

And, under Janet Yellen, the Fed is making a steady, insistent and disciplined argument that growing the Fed’s power is necessary for economic stability. The Fed wants to keep its balance sheet large, hold interest rates low, and regulate banking activities. From a distance this behavior looks awfully like that of the Bank of China.

The alternative would be for the Fed to shrink its balance sheet, hold interest rates where economic fundamentals and the Taylor Rule suggest they should be, and have faith that the free market will police excessively risky behavior. But, the US has entered a new era of doubt about free markets.
This was pre-ordained when Congress passed the Troubled Asset Relief Plan (TARP) in October 2008 – a $700 billion slush fund for the government that was sold as a way to save the world from Wall Street. As President Bush later said, “[We] abandoned free market principles to save the free market system.”

But, by violating free market principles, politicians created conditions which allowed the Fed to justify regulation of the economy in new and broadly expansive ways. Republicans were always the defenders of free markets, but TARP signaled a new era. Now, because the GOP won’t say TARP was a mistake, it has no effective argument against the Fed grabbing more power.

What this means for the economy is that flawed economic models, combined with the very visible hand of regulation, are distorting economic activity and leading the US toward more politicized control of financial markets. What could keep the Fed from lowering capital requirements on clean energy and raising them on fossil fuels? After all, many argue that fossil fuels are destabilizing.

But even more dangerous is that the Fed will hold rates down at artificially low levels for long periods of time in order to bring unemployment back down, all the while believing it can control the risks of easy money by using macroprudential regulation tools.

There are many reasons to disagree with this policy, but the most important is that artificially low rates distort decision making. High-return businesses will lever up unnecessarily and probably show up as bubbles. But some low-return enterprises will wrongly assume that borrowing to expand is still profitable. If resources flow too heavily to low return businesses, the economy will be less efficient and have more danger of inflation.

When rates eventually rise, both these behaviors will be tested and perhaps crack. Rather than trying to figure out where dangerous leverage is being employed, the Fed should put rates at the correct level and keep the whole boom-bust process from happening in the first place.

Congress needs to push back hard against macroprudential regulation, but it’s highly doubtful they will because they don’t understand it. The Fed is expanding its mandate in massive and unprecedented ways. Who is going to stand up and say stop?

Brian S. Wesbury, Chief Economist
Click here for PDF version

 12 
 on: Today at 08:58:59 PM 
Started by Crafty_Dog - Last post by DDF
The term civilian in the law enforcement context means someone who isn't in possession of the powers granted to sworn officers.

A also, do not confuse liability case law with what is taught to officers as an operational model for responding to active shooters.

I won't go round and round with you on this GM. Neither of us will change the other's mind. We would both just be wasting each other's time. Hat tip to you.

 13 
 on: Today at 08:48:02 PM 
Started by Crafty_Dog - Last post by Crafty_Dog
second post

BREAKING NEWS   Monday, July 28, 2014 5:14 PM EDT

U.S. and Europe Agree to Sharply Escalate Sanctions on Russia

The United States and Europe put aside their differences and agreed on Monday to sharply escalate economic sanctions against Russia in a set of coordinated actions driven by the conclusion that Moscow has taken a more direct role in the war in Ukraine.

After months in which European leaders were hesitant to go as far as the Americans, the two sides settled on a package of measures that would target Russia’s financial, energy and defense sectors. In some cases, the Europeans may actually leapfrog beyond what the United States has done, forcing Washington to try to catch up.
The agreement came during an unusual five-way video conference between President Obama and his counterparts from Britain, France, Germany and Italy in advance of a European Union meeting scheduled for Tuesday to consider new sanctions against Russia. American and European officials said the leaders agreed that Russia has not only not backed down since the shooting of a Malaysia Airlines passenger jet but has also accelerated its involvement in Ukraine’s burgeoning civil war.

READ MORE »
http://www.nytimes.com/2014/07/29/world/europe/us-and-europe-agree-to-escalate-sanctions-on-russia.html?emc=edit_na_20140728





 14 
 on: Today at 08:45:58 PM 
Started by Crafty_Dog - Last post by Crafty_Dog
Sunday Review | CONTRIBUTING OP-ED WRITER
18 July 2014

Love People, Not Pleasure
Arthur C. Brooks

ABD AL-RAHMAN III was an emir and caliph of Córdoba in 10th-century Spain. He was an absolute ruler who lived in complete luxury. Here’s how he assessed his life:

“I have now reigned above 50 years in victory or peace; beloved by my subjects, dreaded by my enemies, and respected by my allies. Riches and honors, power and pleasure, have waited on my call, nor does any earthly blessing appear to have been wanting to my felicity.”

Fame, riches and pleasure beyond imagination. Sound great? He went on to write:

“I have diligently numbered the days of pure and genuine happiness which have fallen to my lot: They amount to 14.”

Abd al-Rahman’s problem wasn’t happiness, as he believed — it was unhappiness. If that sounds like a distinction without a difference, you probably have the same problem as the great emir. But with a little knowledge, you can avoid the misery that befell him.

What is unhappiness? Your intuition might be that it is simply the opposite of happiness, just as darkness is the absence of light. That is not correct. Happiness and unhappiness are certainly related, but they are not actually opposites. Images of the brain show that parts of the left cerebral cortex are more active than the right when we are experiencing happiness, while the right side becomes more active when we are unhappy.

As strange as it seems, being happier than average does not mean that one can’t also be unhappier than average. One test for both happiness and unhappiness is the Positive Affectivity and Negative Affectivity Schedule test. I took the test myself. I found that, for happiness, I am at the top for people my age, sex, occupation and education group. But I get a pretty high score for unhappiness as well. I am a cheerful melancholic.

So when people say, “I am an unhappy person,” they are really doing sums, whether they realize it or not. They are saying, “My unhappiness is x, my happiness is y, and x > y.” The real questions are why, and what you can do to make y > x.

If you ask an unhappy person why he is unhappy, he’ll almost always blame circumstance. In many cases, of course, this is justified. Some people are oppressed or poor or have physical ailments that make life a chore. Research unsurprisingly suggests that racism causes unhappiness in children, and many academic studies trace a clear link between unhappiness and poverty. Another common source of unhappiness is loneliness, from which about 20 percent of Americans suffer enough to make it a major source of unhappiness in their lives.

THERE are also smaller circumstantial sources of unhappiness. The Princeton psychologist Daniel Kahneman and his colleagues measured the “negative affect” (bad moods) that ordinary daily activities and interactions kick up. They found that the No. 1 unhappiness-provoking event in a typical day is spending time with one’s boss (which, as a boss, made me unhappy to learn).

Circumstances are certainly important. No doubt Abd al-Rahman could point to a few in his life. But paradoxically, a better explanation for his unhappiness may have been his own search for well-being. And the same might go for you.

Have you ever known an alcoholic? They generally drink to relieve craving or anxiety — in other words, to attenuate a source of unhappiness. Yet it is the drink that ultimately prolongs their suffering. The same principle was at work for Abd al-Rahman in his pursuit of fame, wealth and pleasure.

Consider fame. In 2009, researchers from the University of Rochester conducted a study tracking the success of 147 recent graduates in reaching their stated goals after graduation. Some had “intrinsic” goals, such as deep, enduring relationships. Others had “extrinsic” goals, such as achieving reputation or fame. The scholars found that intrinsic goals were associated with happier lives. But the people who pursued extrinsic goals experienced more negative emotions, such as shame and fear. They even suffered more physical maladies.

This is one of the cruelest ironies in life. I work in Washington, right in the middle of intensely public political battles. Bar none, the unhappiest people I have ever met are those most dedicated to their own self-aggrandizement — the pundits, the TV loudmouths, the media know-it-alls. They build themselves up and promote their images, but feel awful most of the time.

That’s the paradox of fame. Just like drugs and alcohol, once you become addicted, you can’t live without it. But you can’t live with it, either. Celebrities have described fame like being “an animal in a cage; a toy in a shop window; a Barbie doll; a public facade; a clay figure; or, that guy on TV,” according to research by the psychologist Donna Rockwell. Yet they can’t give it up.

That impulse to fame by everyday people has generated some astonishing innovations. One is the advent of reality television, in which ordinary people become actors in their day-to-day lives for others to watch. Why? “To be noticed, to be wanted, to be loved, to walk into a place and have others care about what you’re doing, even what you had for lunch that day: that’s what people want, in my opinion,” said one 26-year-old participant in an early hit reality show called “Big Brother.”

And then there’s social media. Today, each of us can build a personal little fan base, thanks to Facebook, YouTube, Twitter and the like. We can broadcast the details of our lives to friends and strangers in an astonishingly efficient way. That’s good for staying in touch with friends, but it also puts a minor form of fame-seeking within each person’s reach. And several studies show that it can make us unhappy.

It makes sense. What do you post to Facebook? Pictures of yourself yelling at your kids, or having a hard time at work? No, you post smiling photos of a hiking trip with friends. You build a fake life — or at least an incomplete one — and share it. Furthermore, you consume almost exclusively the fake lives of your social media “friends.” Unless you are extraordinarily self-aware, how could it not make you feel worse to spend part of your time pretending to be happier than you are, and the other part of your time seeing how much happier others seem to be than you?

Some look for relief from unhappiness in money and material things. This scenario is a little more complicated than fame. The evidence does suggest that money relieves suffering in cases of true material need. (This is a strong argument, in my view, for many safety-net policies for the indigent.) But when money becomes an end in itself, it can bring misery, too.

For decades, psychologists have been compiling a vast literature on the relationships between different aspirations and well-being. Whether they examine young adults or people of all ages, the bulk of the studies point toward the same important conclusion: People who rate materialistic goals like wealth as top personal priorities are significantly likelier to be more anxious, more depressed and more frequent drug users, and even to have more physical ailments than those who set their sights on more intrinsic values.

No one sums up the moral snares of materialism more famously than St. Paul in his First Letter to Timothy: “For the love of money is the root of all evil: which while some coveted after, they have erred from the faith, and pierced themselves through with many sorrows.” Or as the Dalai Lama pithily suggests, it is better to want what you have than to have what you want.

SO fame and money are out. How about pleasures of the flesh? Take the canonical hedonistic pleasure: lust. From Hollywood to college campuses, many assume that sex is always great, and sexual variety is even better.

This assumption actually has a name: the “Coolidge Effect,” named after the 30th president of the United States. The story (probably apocryphal) begins with Silent Cal and Mrs. Coolidge touring a poultry farm. The first lady noticed that there were very few roosters, and asked how so many eggs could be fertilized. The farmer told her that the virile roosters did their jobs over and over again each day. “Perhaps you could point that out to Mr. Coolidge,” she told him. The president, hearing the remark, asked whether the rooster serviced the same hen each time. No, the farmer told him — there were many hens for each rooster. “Perhaps you could point that out to Mrs. Coolidge,” said the president.

The president obviously figured these must be happy roosters. And notwithstanding the moral implications, the same principle should work for us. Right?

Wrong. In 2004, two economists looked into whether more sexual variety led to greater well-being. They looked at data from about 16,000 adult Americans who were asked confidentially how many sex partners they had had in the preceding year, and about their happiness. Across men and women alike, the data show that the optimal number of partners is one.

This might seem totally counterintuitive. After all, we are unambiguously driven to accumulate material goods, to seek fame, to look for pleasure. How can it be that these very things can give us unhappiness instead of happiness? There are two explanations, one biological and the other philosophical.

From an evolutionary perspective, it makes sense that we are wired to seek fame, wealth and sexual variety. These things make us more likely to pass on our DNA. Had your cave-man ancestors not acquired some version of these things (a fine reputation for being a great rock sharpener; multiple animal skins), they might not have found enough mating partners to create your lineage.

But here’s where the evolutionary cables have crossed: We assume that things we are attracted to will relieve our suffering and raise our happiness. My brain says, “Get famous.” It also says, “Unhappiness is lousy.” I conflate the two, getting, “Get famous and you’ll be less unhappy.”

But that is Mother Nature’s cruel hoax. She doesn’t really care either way whether you are unhappy — she just wants you to want to pass on your genetic material. If you conflate intergenerational survival with well-being, that’s your problem, not nature’s. And matters are hardly helped by nature’s useful idiots in society, who propagate a popular piece of life-ruining advice: “If it feels good, do it.” Unless you share the same existential goals as protozoa, this is often flat-out wrong.

More philosophically, the problem stems from dissatisfaction — the sense that nothing has full flavor, and we want more. We can’t quite pin down what it is that we seek. Without a great deal of reflection and spiritual hard work, the likely candidates seem to be material things, physical pleasures or favor among friends and strangers.

We look for these things to fill an inner emptiness. They may bring a brief satisfaction, but it never lasts, and it is never enough. And so we crave more. This paradox has a word in Sanskrit: upadana, which refers to the cycle of craving and grasping. As the Dhammapada (the Buddha’s path of wisdom) puts it: “The craving of one given to heedless living grows like a creeper. Like the monkey seeking fruits in the forest, he leaps from life to life... Whoever is overcome by this wretched and sticky craving, his sorrows grow like grass after the rains.”

This search for fame, the lust for material things and the objectification of others — that is, the cycle of grasping and craving — follows a formula that is elegant, simple and deadly:

Love things, use people.

This was Abd al-Rahman’s formula as he sleepwalked through life. It is the worldly snake oil peddled by the culture makers from Hollywood to Madison Avenue. But you know in your heart that it is morally disordered and a likely road to misery. You want to be free of the sticky cravings of unhappiness and find a formula for happiness instead. How? Simply invert the deadly formula and render it virtuous:

Love people, use things.

Easier said than done, I realize. It requires the courage to repudiate pride and the strength to love others — family, friends, colleagues, acquaintances, God and even strangers and enemies. Only deny love to things that actually are objects. The practice that achieves this is charity. Few things are as liberating as giving away to others that which we hold dear.

This also requires a condemnation of materialism. This is manifestly not an argument for any specific economic system. Anyone who has spent time in a socialist country must concede that materialism and selfishness are as bad under collectivism, or worse, as when markets are free. No political ideology is immune to materialism.

Finally, it requires a deep skepticism of our own basic desires. Of course you are driven to seek admiration, splendor and physical license. But giving in to these impulses will bring unhappiness. You have a responsibility to yourself to stay in the battle. The day you declare a truce is the day you become unhappier. Declaring war on these destructive impulses is not about asceticism or Puritanism. It is about being a prudent person who seeks to avoid unnecessary suffering.

Abd al-Rahman never got his happiness sums right. He never knew the right formula. Fortunately, we do.

A contributing opinion writer and the president of the American Enterprise Institute.

 15 
 on: Today at 08:39:21 PM 
Started by Crafty_Dog - Last post by DougMacG
Yes, welcome Robert!.
"I'm a Christian Conservative Republican."
There aren't many places where you can say that anymore, lol.

"along the lines of Reagan, and George Washington, if I had to choose. I believe in limited government, as they are only supposed to be there to create a safe environment for the purpose of our individual growth, to the benefit of us all. Strong individual States......United."

Very well put! That is a message I wish we could share with the tens of millions of people who have recently become disillusioned with the false promises of big government liberalism.

Imagine for a second that we allowed, even encouraged people to prosper without limit instead of stomping out success,  And then in a Judeo-Christian spirit, the people who succeed help others who actually need and deserve help.  Those who achieve and give back would feel rewarded instead of robbed and those receiving help would feel thankful, instead of entitled.  It is a debate or question I call tax vs. charity.  I would like to hear a liberal explain why that wouldn't work in place of the all-powerful government system that is failing so badly.  The liberal argument comes down to condescension; people are too greedy to help others without coercion, but that isn't true.

Anyway, welcome and see on the other threads...

 16 
 on: Today at 08:37:55 PM 
Started by Crafty_Dog - Last post by G M
Welcome RSB.

 17 
 on: Today at 08:37:11 PM 
Started by Crafty_Dog - Last post by G M
This isn't the 70's, it's the reset.

 18 
 on: Today at 08:27:26 PM 
Started by Crafty_Dog - Last post by Crafty_Dog
Interesting, but I remain a skeptic.  Rising interest rates will kill gold, just as they did in the late 70s.

 19 
 on: Today at 08:20:50 PM 
Started by Crafty_Dog - Last post by Crafty_Dog
U.S. Says Russia Violated Arms Treaty

The United States has concluded that Russia’s test of a ground-launched cruise missile violated a landmark treaty, and informed President Vladimir V. Putin of the findings in a letter on Monday.

The 1987 Intermediate-Range Nuclear Forces Treaty bans medium-range missiles, which are defined as ground-launched ballistic or cruise missiles capable of flying 300 to 3,400 miles. It was signed by President Reagan and Mikhail Gorbachev, who was then the Soviet leader, and helped seal the end of the Cold War.

The allegation adds another dispute to a relationship already burdened by tensions over the Kremlin’s support for separatists in Ukraine.

READ MORE »
http://www.nytimes.com/2014/07/29/world/europe/us-says-russia-tested-cruise-missile-in-violation-of-treaty.html?emc=edit_na_20140728


 20 
 on: Today at 08:11:29 PM 
Started by Crafty_Dog - Last post by Crafty_Dog
Welcome aboard RSB!

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