Free money for banks and not-so-free money for everybody else isn't such a crowd-pleaser.
In fact, it seems like welfare for the wealthy. It doesn't take much financial acumen to make a profit when you can get money for nothing from the Fed and lend it back to the government for a few hundred basis points. How can normal people get in on this? That's what former FDIC chief Sheila Bair asked in a recent tongue-in-cheek piece calling for the Federal Reserve to give everyone interest-free $10 million loans.
But there is nothing special about zero interest rates.
The below chart plots the difference between the 10-year Treasury yield and the Fed funds rate over the past 30 years. In other words, it's the profit that banks can make from lending risk-free. See if you can spot when the Fed pushed interest rates down to zero.
Short-term interest rates hit zero in December of 2008. The risk-free spread banks could earn jumped up then -- but it wasn't any higher than it had been in the past.
That makes sense. Long-term interest rates depend on expected short-term interest rates. When the economy looks bad, the market expects short-term interest rates to stay low -- which means that long-term rates do the same. The difference between short and long-term rates doesn't get much out of whack, even when rates are zero.
But Fed critics do have something of a point. The reason zero interest rates feel like such a giveaway is that lending standards have gotten much tougher for most everyone else. If you're not the government or a Fortune 500 company, it's hard to get a loan nowadays.
There's not great data on small business lending, but junk bond yields are a decent proxy. Here's the difference between those yields and the Fed funds rate.
Spreads skyrocketed when the crisis hit and have been slow to come down since. That the banks get free credit when everyone else is struggling to get any credit makes it galling. But it's not a "secret bailout" as some call it. The reality is more mundane: It's banks tightening credit standards -- probably too much -- after they were too loose during the bubble years.
There are plenty of things to be mad at the big banks and the Fed for over the last few years. But criticizing banks for lending for more than they borrow for, like Bair does, is triffling. That's just the definition of banking. Zero interest rates don't really change this. Our limited supply of outrage is better directed at actual outrages.
Walk into the offices of Memac Ogilvy Advize, an advertising firm on the third floor of a car rental building in a business district of West Amman, Jordan, and you’ll be greeted with an immense black-and-white photo of Donald Trump’s face. The red cursive text printed across it reads: “We Trumped the awards.”
The sign sits behind a reception counter boasting a large trophy won at the Dubai Lynx 2017, an annual advertising competition where Memac Ogilvy won the Grand Prix for PR (a first for any Jordanian agency) along with four other silver and gold prizes, for trolling Trump in their ads on behalf of Royal Jordanian Airlines.
Conservatives once warned that Obamacare would produce the Democratic Waterloo. Their inability to accept the principle of universal coverage has, instead, led to their own defeat.
Seven years and three days ago, the House of Representatives grumblingly voted to approve the Senate’s version of the Affordable Care Act. Democrats in the House were displeased by many of the changes introduced by Senate Democrats. But in the interval after Senate passage, the Republicans had gained a 41st seat in the Senate. Any further tinkering with the law could trigger a Republican filibuster. Rather than lose the whole thing, the House swallowed hard and accepted a bill that liberals regarded as a giveaway to insurance companies and other interest groups. The finished law proceeded to President Obama for signature on March 23, 2010.
A few minutes after the House vote, I wrote a short blog post for the website I edited in those days. The site had been founded early in 2009 to argue for a more modern and more moderate form of Republicanism. The timing could not have been worse. At precisely the moment we were urging the GOP to march in one direction, the great mass of conservatives and Republicans had turned on the double in the other, toward an ever more wild and even paranoid extremism. Those were the days of Glenn Beck’s 5 o’clock Fox News conspiracy rants, of Sarah Palin’s “death panels,” of Orly Taitz and her fellow Birthers, of Tea Party rallies at which men openly brandished assault rifles.
The College Board earns over half of all its revenues from the courses—and, in an uncertain environment, students keep being suckered.
Fraudulent schemes come in all shapes and sizes. To work, they typically wear a patina of respectability. That's the case with Advanced Placement courses, one of the great frauds currently perpetrated on American high-school students.
That's a pretty strong claim, right? You bet. But why not be straightforward when discussing a scam the scale and audacity of which would raise Bernie Madoff's eyebrows?
The miscellany of AP courses offered in U.S. high schools under the imprimatur of the College Board probably started with good intentions. The idea, going back to the 1950s, was to offer college-level courses and exams to high-school students. The courses allegedly provide students the kind of rigorous academic experience they will encounter in college as well as an opportunity to earn college credit for the work.
"Where people are desperate, it is still America they count on, whether they love or scorn it, and America they blame when aid does not come."
After Donald Trump’s victory in the U.S. presidential election in November, a foreign ambassador accosted one of my deputies at the State Department, where from 2014 to early this year I served as theassistant secretary of state for democracy, human rights, and labor. “You must be so sad!” the man, a representative of a Central Asian government, said, grinning widely. “All this talk of elections being important, of democracy being important, and now look at you! Now even your new president says there were 3 million illegal votes in your election! … You must all feel so stupid these days.”
Since then, the global club of autocrats has been crowing about Trump. Sudan’s dictator Omar al Bashir praised him for focusing “on the interests of the American citizen, as opposed to those who talk about democracy, human rights, and transparency.” Iran’s Supreme Leader Ayatollah Khamenei thanked him for showing “America’s true face” by trying to ban Muslim immigration. The Cambodian government justified attacks on journalists by saying Trump, too, recognizes that “news published by [international] media institutions does not reflect the real situation.”
The Obama years left Republicans with excellent ratings from the Heritage Foundation, and no idea how to whip a vote.
The Republican Party’s marquee legislative initiative had just imploded in spectacular, and humiliating, fashion Friday afternoon when Paul Ryan stepped up to a podium on Capitol Hill. The beleaguered house speaker wasted no time in diagnosing the failure of his caucus. “Moving from an opposition party to a governing party comes with some growing pains,” he said. “And, well, we’re feeling those growing pains today.”
Ryan wasn’t wrong. The GOP’s inability to maneuver a health-care bill through the House this week—after seven years of promising to repeal and replace Obamacare—is, indeed, emblematic of a deeper dysfunction that grips his party. But that dysfunction may not be as easy to cure as Ryan and other GOP leaders believe.
The House abandoned its legislation to repeal and replace the Affordable Care Act, handing President Trump and Speaker Paul Ryan a major defeat.
Updated on March 24 at 6:28 p.m. ET
To a man and woman, nearly every one of the 237 Republicans elected to the House last November made the same promise to voters: Give us control of Congress and the White House, and we will repeal and replace the Affordable Care Act.
On Friday, those lawmakers abandoned that effort, conceding that the Republican Party’s core campaign pledge of the last seven years will go unfulfilled. “I will not sugarcoat this: This is a disappointing day for us,” House Speaker Paul Ryan said at a press conference after he informed Republicans that he was ditching the American Health Care Act.
“We did not have quite the votes to replace this law,” Ryan said. “And, so yeah, we’re going to be living with Obamacare for the foreseeable future.”
Speaking after the collapse of the Republican health-care bill, the president assigned blame to plenty of parties but cast himself as a mere bystander.
Speaking in the Oval Office Friday afternoon, President Trump surveyed the wreckage of the Obamacare repeal effort and issued a crisp, definitive verdict: I didn’t do it.
The president said he didn’t blame Speaker Paul Ryan, though he had plenty of implied criticism for the speaker. “I like Speaker Ryan. He worked very hard,” Trump said, but he added: “I'm not going to speak badly about anybody within the Republican Party. Certainly there's a big history. I really think Paul worked hard.” He added ruefully that the GOP could have taken up tax-reform first, instead of Obamacare—the reverse of Ryan’s desired sequence. “Now we’re going to go for tax reform, which I’ve always liked,” he said.
Most of management theory is inane, writes our correspondent, the founder of a consulting firm. If you want to succeed in business, don’t get an M.B.A. Study philosophy instead
During the seven years that I worked as a management consultant, I spent a lot of time trying to look older than I was. I became pretty good at furrowing my brow and putting on somber expressions. Those who saw through my disguise assumed I made up for my youth with a fabulous education in management. They were wrong about that. I don’t have an M.B.A. I have a doctoral degree in philosophy—nineteenth-century German philosophy, to be precise. Before I took a job telling managers of large corporations things that they arguably should have known already, my work experience was limited to part-time gigs tutoring surly undergraduates in the ways of Hegel and Nietzsche and to a handful of summer jobs, mostly in the less appetizing ends of the fast-food industry.
If the lobbyist’s work did indeed “greatly benefit the Putin Government,” the contract wouldn’t be especially out of the ordinary for an American lobbyist—or for Russia.
MOSCOW—The reports that former Trump campaign manager Paul Manafort had had a contract for tens of millions of dollars to “greatly benefit the Putin Government” were not exactly news here. And, in a certain sense, they didn’t have to be news in Washington, either.
Manafort, who has reportedly just volunteered to testify in the House Intelligence Committee’s investigation of Russian meddling in the U.S. election, had been a lobbyist, a notorious one, for decades. His work for less-than-democratic governments, including various African strongmen and the Marcos family of the Philippines, had been well-known in Washington and reported over the last year. It is also not uncommon for lobbyists and political operatives waiting out an administration of the opposite party to work abroad, helping foreign governments of whatever stripe sharpen their political game. Democratic operatives who had worked on the Obama and Clinton campaigns, for example, have done work advising politicians in Britain, Ukraine, and Georgia. Manafort seemed to have fewer moral qualms and filters than others—the only ticket to access his political skills, it seems, was the right amount of money—but it was all part of the swamp the Donald Trump campaign, with Manafort at the helm for about five months, promised to drain.
The philosophers he influenced set the stage for the technological revolution that remade our world.
THE HISTORY Ofcomputers is often told as a history of objects, from the abacus to the Babbage engine up through the code-breaking machines of World War II. In fact, it is better understood as a history of ideas, mainly ideas that emerged from mathematical logic, an obscure and cult-like discipline that first developed in the 19th century. Mathematical logic was pioneered by philosopher-mathematicians, most notably George Boole and Gottlob Frege, who were themselves inspired by Leibniz’s dream of a universal “concept language,” and the ancient logical system of Aristotle.
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Mathematical logic was initially considered a hopelessly abstract subject with no conceivable applications. As one computer scientist commented: “If, in 1901, a talented and sympathetic outsider had been called upon to survey the sciences and name the branch which would be least fruitful in [the] century ahead, his choice might well have settled upon mathematical logic.” And yet, it would provide the foundation for a field that would have more impact on the modern world than any other.