By failing to appoint new members to the Federal Reserve, Obama has failed the economy
Behind every great president stands a great central banker. Ronald Reagan had Paul Volcker. Dwight Eisenhower had William McChesney Martin. And FDR had, well, FDR.
There's a corollary. Behind every great central banker stands a great central banking committee. Or at least a pliant one. It's this latter reality that President Obama still has not quite recognized. And this malign neglect of most matters monetary has added a wholly unnecessary degree-of-difficulty to the economic recovery.
Here's a depressing reminder: We're in a $1 trillion hole. That's how much income we have been losing every year since the onset of the Great Recession. Ben Bernanke and Co. have done a good job preventing a full-on replay of the Great Depression, but Ben Bernanke and Co. have not done a good job preventing a lost decade. The key phrase here is "and Co."
Bernanke doesn't set monetary policy by himself. That's what the Federal Open Market Committee (FOMC) votes on. Its structure is a bit Byzantine and not terribly important, but what is important is that the Fed Chairman usually gets his way without any dissent. That hasn't been true lately. The Fed's unconventional measures have unsurprisingly not been too popular with the FOMC's more conventional members. Unfortunately, that hasn't stopped Bernanke from trying to reach a consensus. He thinks he needs to. Bernanke recently told Roger Lowenstein that he thinks any policy that doesn't get at least a 7-3 majority simply won't be credible. This political calculation gives the hawks more policy influence than they would otherwise have.
And now it looks like there are more hawks. As Greg Ip of The Economist has pointed out, most of Bernanke's colleagues now want to raise rates before he does. He increasingly looks isolated. Even if Bernanke is inclined to ease a bit more -- and reading between the lines, he might be -- there's little chance of it happening. It's worth remembering that even the hawks project inflation to remain below target and unemployment to remain above target for the next few years. If the Fed believes its own forecasts, it should be doing more.
IT'S TIME TO CALL IN THE CAVALRY
I've left out a fairly important detail. There are two unfilled seats on the FOMC. President Obama's picks for those positions have been among the victims of the endless Republican obstruction in the world's greatest deliberative body. There's a simple solution. Obama could just bypass the Senate with recess appointments. That's what he did for the Consumer Financial Protection Bureau (CFPB) and National Labor Relations Board (NLRB). Why not do the same for the Federal Reserve (or the Federal Housing Finance Agency)?
There's no good reason not to. The administration's rationale is that Republican obstruction over the CFPB and NLRB was particularly pernicious -- that it amounted to de facto nullification. Hence, the extraordinary recess appointments for just those vacancies. But even if that's true, who cares? It's hard to run the government if it's not staffed. So staff it! More importantly, there's little Obama can do that might help the economy more than sending Bernanke a few more friendly faces on the FOMC.
Regrettably, the Obama administration has consistently underestimated the importance of the Fed. That there are still two empty FOMC seats proves as much. So do the administration's (blocked) nominees. Consider Peter Diamond. He's a phenomenal economist -- a Nobel-prize winner -- who's clearly qualified to serve on the FOMC. But he's said that he doesn't think there's much more the Fed can do now. Even if he's right -- and I clearly don't think he is -- wouldn't you rather appoint someone who thinks otherwise and find out if the Fed really is powerless? Someone like ... former Council of Economic Advisers Chair Christina Romer.
Let's try pushing some more before we declare that we're pushing on a string.
NECESSARY, BUT NOT SUFFICIENT
Sending Bernanke some reinforcements wouldn't be some economic panacea. Fed policy actually might not change all that much. But it could shift the FOMC's bias away from hiking and back towards easing, which its forecasts say it should be doing. That potential benefit is worth the cost -- which is approximately zero. (Remember the steep political price Obama paid for his previous recess appointments? Neither do I).
We tend to overlook monetary policy when we judge presidents. It's only natural that we think about presidential accomplishments in terms of things the president, you know, actually does. So we talk about how Reagan unleashed the supply side revolution, Eisenhower balanced the budget, and FDR's New Deal turned the tide against depression. But none of that would have been possible without good central banking. Reagan wouldn't have whipped inflation without Volcker. Eisenhower's postwar boom wouldn't have been quite so strong without Martin's fiercely independent Fed. And FDR might not have broken the psychology of deflation had ... FDR not devalued against gold. (Okay, FDR deserves heaps of credit).
It's hard to have a great presidency without great central banking. It's a necessary, but not sufficient condition. Just ask Herbert Hoover or Jimmy Carter. That's company Obama should be terrified of joining.
“Here is what I would like for you to know: In America, it is traditional to destroy the black body—it is heritage.”
Last Sunday the host of a popular news show asked me what it meant to lose my body. The host was broadcasting from Washington, D.C., and I was seated in a remote studio on the Far West Side of Manhattan. A satellite closed the miles between us, but no machinery could close the gap between her world and the world for which I had been summoned to speak. When the host asked me about my body, her face faded from the screen, and was replaced by a scroll of words, written by me earlier that week.
The host read these words for the audience, and when she finished she turned to the subject of my body, although she did not mention it specifically. But by now I am accustomed to intelligent people asking about the condition of my body without realizing the nature of their request. Specifically, the host wished to know why I felt that white America’s progress, or rather the progress of those Americans who believe that they are white, was built on looting and violence. Hearing this, I felt an old and indistinct sadness well up in me. The answer to this question is the record of the believers themselves. The answer is American history.
New data shows that students whose parents make less money pursue more “useful” subjects, such as math or physics.
In 1780, John Adams wrote a letter to his wife, Abigail, in which he laid out his plans for what his children and grandchildren would devote their lives to. Having himself taken the time to master “Politicks and War,” two revolutionary necessities, Adams hoped his children would go into disciplines that promoted nation-building, such as “mathematicks,” “navigation,” and “commerce.” His plan was that in turn, those practical subjects would give his children’s children room “to study painting, poetry, musick, architecture, statuary, tapestry, and porcelaine.”
Two-hundred and thirty-five years later, this progression—“from warriors to dilettantes,” in the words of the literary scholar Geoffrey Galt Harpham—plays out much as Adams hoped it would: Once financial concerns have been covered by their parents, children have more latitude to study less pragmatic things in school. Kim Weeden, a sociologist at Cornell, looked at National Center for Education Statistics data for me after I asked her about this phenomenon, and her analysis revealed that, yes, the amount of money a college student’s parents make does correlate with what that person studies. Kids from lower-income families tend toward “useful” majors, such as computer science, math, and physics. Those whose parents make more money flock to history, English, and performing arts.
In 1992, the neuroscientist Richard Davidson got a challenge from the Dalai Lama. By that point, he’d spent his career asking why people respond to, in his words, “life’s slings and arrows” in different ways. Why are some people more resilient than others in the face of tragedy? And is resilience something you can gain through practice?
The Dalai Lama had a different question for Davidson when he visited the Tibetan Buddhist spiritual leader at his residence in Dharamsala, India. “He said: ‘You’ve been using the tools of modern neuroscience to study depression, and anxiety, and fear. Why can’t you use those same tools to study kindness and compassion?’ … I did not have a very good answer. I said it was hard.”
The Islamic State is no mere collection of psychopaths. It is a religious group with carefully considered beliefs, among them that it is a key agent of the coming apocalypse. Here’s what that means for its strategy—and for how to stop it.
What is the Islamic State?
Where did it come from, and what are its intentions? The simplicity of these questions can be deceiving, and few Western leaders seem to know the answers. In December, The New York Times published confidential comments by Major General Michael K. Nagata, the Special Operations commander for the United States in the Middle East, admitting that he had hardly begun figuring out the Islamic State’s appeal. “We have not defeated the idea,” he said. “We do not even understand the idea.” In the past year, President Obama has referred to the Islamic State, variously, as “not Islamic” and as al-Qaeda’s “jayvee team,” statements that reflected confusion about the group, and may have contributed to significant strategic errors.
Most adults can’t remember much of what happened to them before age 3 or so. What happens to the memories formed in those earliest years?
My first memory is of the day my brother was born: November 14, 1991. I can remember my father driving my grandparents and me over to the hospital in Highland Park, Illinois, that night to see my newborn brother. I can remember being taken to my mother’s hospital room, and going to gaze upon my only sibling in his bedside cot. But mostly, I remember what was on the television. It was the final two minutes of a Thomas the Tank Engine episode. I can even remember the precise story: “Percy Takes the Plunge,” which feels appropriate, given that I too was about to recklessly throw myself into the adventure of being a big brother.
In sentimental moments, I’m tempted to say my brother’s birth is my first memory because it was the first thing in my life worth remembering. There could be a sliver of truth to that: Research into the formation and retention of our earliest memories suggests that people’s memories often begin with significant personal events, and the birth of a sibling is a textbook example. But it was also good timing. Most people’s first memories date to when they were about 3.5 years old, and that was my age, almost to the day, when my brother was born.
The religious scholar from the viral Fox News interview explains how Dostoevsky's The Brothers Karamazov taught him the difference between faith and religion.
By Heart is a series in which authors share and discuss their all-time favorite passages in literature.
By now, millions of people have watched FOX news host Lauren Green’s grilling of writer Reza Aslan. Last week, the clip of the interview made the Internet flare up—mostly in outcry that a news anchor would so flagrantly suggest that Muslim thinkers are more biased and agenda-driven than other (presumably white, Christian) talking heads.
Though Green’s questions received scorn, media reaction largely avoided the more substantive questions brought up by the interview and Aslan’s new book, Zealot: The Life and Times of Jesus of Nazareth. And that’s too bad. These are lines of inquiry worth tracing: What does Jesus stand for, and who gets to decide? Who has the authority to determine what a figure of massive religious and cultural importance really “means”?
The singer’s violent revenge fantasy was intended to provoke outrage, and to get people to talk about her. It succeeds on both counts.
Of all the scandalized reactions to Rihanna’s music video for “Bitch Better Have My Money,” my favorite comes, as is not surprising for this sort of thing, from the Daily Mail. Labelling herself in the headline as a “concerned parent” (a term to transport one to the days of Tipper Gore’s crusade against lyrics if there ever was one), Sarah Vine opens her column by talking at length about how so very, very reluctant she was to watch Rihanna’s new clip. Then she basically goes frame-by-frame through the video, recounting her horror at what unfolds. “By the time it had finished, I wondered whether I ought not to report [Rihanna] to the police,” Vine writes. “Charges: pornography, incitement to violence, racial hatred.”
Gentrification is pushing long-term residents out of urban neighborhoods. Can collective land ownership keep prices down permanently?
AUSTIN, Tex.—Not long ago, inner cities were riddled with crime and blight and affluent white residents high-tailed it to the suburbs, seeking better schools, safer streets, and, in some cases, fewer minority neighbors.
But today, as affluent white residents return to center cities, people who have lived there for years are finding they can’t afford to stay.
Take the case of the capital city of Texas, where parts of East Austin, right next to downtown, are in the process of becoming whiter, and hip restaurants, coffee shops, and even a barcatering to bicyclists are opening. Much of Austin’s minority population, meanwhile, is priced out, and so they’re moving to far-out suburbs such as Pflugerville and Round Rock, where rents are affordable and commutes are long.
The show reveals what happened to Ray, while Bezzerides and Woodrugh investigate the mayor, and Frank indulges in some amateur dentistry.
Orr: More than a third of the way into this season of True Detective, I’d say that the two best scenes so far were adjacent ones, albeit ones in consecutive episodes: the last scene of episode two—the man in the bird mask appearing out of nowhere, the stunning (apparent) death of a principal character as the radio plays “I Pity the Fool”—and the first scene of tonight’s episode: Ray and his father in the bar, and yet clearly someplace else altogether, someplace otherworldly. “Where is this?” Ray asks. His dad replies, “I don’t know. You were here first.” Is this Ray’s dying vision? Is he a ghost who will watch the season unfold from beyond the grave?