Economy & Business

What Can We Learn from the Fed’s Most Recent Meeting?

Federal Reserve Chairman Jerome H. Powell (Sait Serkan Gurbuz/Reuters)

The Federal Reserve should consider an expansionary monetary policy. So say Ramesh Ponnuru and David Beckworth, who, in the current issue of National Review, argue that the Fed has kept money too tight throughout the economic expansion of the 2010s. “The Fed’s apparent bias against letting spending and inflation drift higher,” they write, “makes it more likely that the next economic downturn will again be severe and the next recovery will again be sluggish.” Progressives such as J.W. Mason, who lament what they see as a lamentable tendency at the Fed to worry more about controlling inflation than maintaining a robust labor market, have made similar arguments.

The two groups have different desiderata, to be sure. Ponnuru and Beckworth are market monetarists who think the conventional wisdom that interest rates indicate the stance of monetary policy is wrong. What really indicates the stance of monetary policy, they say, is nominal-spending growth. Were the Fed to set a nominal-spending target rather than an inflation target, it would be free to pursue a more expansionary policy when the time is right; right now, with spending growth well below its pre-crisis trend, seems like one of those times. Many progressives who want an expansionary policy, on the other hand, are less interested in flexibility and more interested in permanently reorienting the Fed’s institutional priorities towards the interests of the working class. Nonetheless, the two camps seem to agree on what policy the Fed should pursue right now: an expansionary one.

With that in mind, let’s take a look at the minutes from this week’s meeting of the Federal Open Markets Committee. The meeting was the first of Jay Powell’s tenure as chairman of the Fed, and there were some encouraging nuggets for critics of the current monetary regime — left and right alike.

The FOMC minutes briefly mention two key market-monetarist priorities. A “couple” of committee members suggested that the Fed “might consider expressing its [inflation] target as a range rather than a point estimate,” while “a few other participants” mentioned a framework in which the bank “would strive to make up for past deviations of inflation from [the] target.” Inflation has consistently come in below the 2 percent target; it appears at least four FOMC members kicked around the idea of allowing it to temporarily rise in an effort to stabilize nominal-spending growth.

Meanwhile, a “couple” of participants “questioned the usefulness of a Phillips Curve–type framework” that asserts a connection between the tightness of the labor market and inflation. The Fed generally responds to news of low unemployment and strong wage gains by tightening the money supply, fearing a pickup in inflation. But lately, the connection appears to have loosened (some economists believe the labor market is not as tight as it seems): Unemployment is at record lows and wages are beginning to rise, but inflation remains below target. Fed governors skeptical of the Philips Curve might be more amenable to pursuing expansionary policy even if wages continue to rise.

These are encouraging signs to those who want an expansionary policy. But they’re just signs. Most FOMC members agreed that the Philips Curve is a useful concept; the talk about level targeting didn’t gain enough traction to inspire a change in policy; and the headline news from the meeting was that the Fed’s growing optimism about the economy could invite “further” interest-rate hikes. All of this means the conventional wisdom is still conventional wisdom. If you’re hoping for a newly enlightened Federal Reserve, you’re going to have to wait a bit longer.

Health Care

Canadian Hospice Says No to Euthanasia

(Mark Blinch/Reuters)

Assisted suicide/euthanasia is completely contrary to the hospice vision espoused by the late great medical humanitarian Cecily Saunders, who created the modern hospice movement. She stood steadfastly against assisted-suicide legalization. Indeed, suicide prevention is one of hospice’s most fundamental services, I would say close in importance to pain control. As Saunders told me when I had the great honor of interviewing her in London, assisted suicide denies the intrinsic dignity of hospice patients.

Alas, in recent years some U.S. hospice organizations have been weak-kneed in defending the hospice philosophy against assisted-suicide predation. Too often, movement leaders — not wanting to be controversial — have gone “neutral” on legalization. That is an abdication of duty and an abandonment of hospice patients and their families. Some hospices even participate in assisting suicides where it is legal.

This is also happening in Canada where lethal-injection euthanasia was recently legalized. Religious hospices have pushed back and received some exemptions from having to participate. Now Langley Hospice — hooray! — a secular hospice in British Columbia is saying no to euthanasia based on the philosophical precepts of the hospice movement itself.

Langley had previously required a patient seeking euthanasia to transfer out before being killed. It is apparently part of Fraser Health, which buckled and changed the policy to permit euthanasia on premises. The board of directors of Langley have pushed back. From the Langley Hospice Board of Directors statement (my emphasis):

  • The Langley Hospice Society will continue to uphold our constitution, bylaws and mandate to provide palliative care for dying people and their families in a supportive environment, which means that we plan to continue upholding our founding mission and philosophy of care that we value life and accept death as a normal process and that we “neither hasten nor postpone death.”
  • The Langley Hospice Society recognizes the right for all Canadians to have access to information about end-of-life options, including MAiD. However, we do not recognize that this right is a superior right to the recognized philosophy of hospice and palliative care. We do not believe that MAiD should be implemented in hospices…
  • We are concerned about the adverse consequences, emotional and otherwise that the Fraser Health December 2017 directive has had; first and foremost to the patients, clients and families we serve and also, to our Langley Community, Donors, Potential Donors, Hospice Volunteers and Staff…
  • We believe that as a non-faith based hospice, Fraser Health should provide Langley Hospice with the same “exemption option” it has provided to faith-based hospices as the Fraser Health mandate is in direct opposition to our mission and philosophy to “neither hasten nor postpone death.” Not granting an exemption to do so is discriminatory.

Precisely. Hospice is not “hemlock.” Whether the hospice is religious or secular, no hospice should participate in the killings or suicides of its patients. And certainly, they should never be forced to so do.

Let’s hope their courage stiffens the spines of our own domestic quavering hospice administrators.

Politics & Policy

Paid Family Leave and the Right

(Photo: Larryhw/Dreamstime)

I have been pretty skeptical of proposed government policies to promote paid family leave. But a recent proposal from Kristin Shapiro, a fellow at the Independent Women’s Forum, struck me as superior to previous proposals and worth considering. Her idea is to let new parents borrow from their future Social Security benefits. They could replace a portion of their wages for twelve weeks of leave, and in return delay taking Social Security benefits for a comparable period. (The calculations are being refined, but I gather that to make the numbers balance twelve weeks of leave would probably have to mean twelve weeks of delay.)

The more I’ve followed the debate, the more I’ve supported the idea. That debate continues, especially among conservatives and libertarians. Michael Strain and I argued about it in Bloomberg View recently, and Vanessa Brown Calder took up the case against it at Cato’s blog yesterday. The New York Times covered the debate this week, too.

The Times article mentions that many conservatives and libertarians have sought to convert, or partly convert, Social Security into a system of personal accounts. One thought that crossed my mind while reading it is that there are certain similarities between the personal-account and paid-leave ideas that ought to reduce conservative skepticism of the latter.

It never occurred to most people on the Right to object to personal accounts as a “new entitlement.” They understood that the accounts wouldn’t increase spending over the long run and simply added a new option to an existing entitlement. They didn’t reject the accounts because they would shift costs from the future and therefore require transitional financing. (Instead of paying Social Security checks to future retirees, the government would have to come up with cash to seed their accounts.) And they didn’t object to personal accounts on the theory that politicians would inevitably up-end the fiscal balance of the deal by just giving everyone the accounts and their full Social Security benefits too.

Yet we’re hearing the analogue of each objection to the paid-leave idea. Its opponents on the Right are calling it a new entitlement, treating its (much smaller) effect on the medium-term fiscal balance as a deal-breaker, and devising implausibly pessimistic political scenarios about its future.

Maybe conservatives and libertarians have been too optimistic about personal accounts in the past, and those on the right who object to using Social Security to help parents take time off from work are seeing this issue more clearly. But I think it’s more likely that there’s a mental block that’s keeping the paid-leave objectors from seeing how much these debates have in common.


Feds Aren’t Verifying Passport Data


Is there any agency in American law enforcement actually doing its job? Today in Wired:

Passports, like any physical ID, can be altered and forged. That’s partly why for the last 11 years the United States has put RFID chips in the back panel of its passports, creating so-called e-Passports. The chip stores your passport information — like name, date of birth, passport number, your photo, and even a biometric identifier — for quick, machine-readable border checks. And while e-Passports also store a cryptographic signature to prevent tampering or forgeries, it turns out that despite having over a decade to do so, US Customs and Border Protection hasn’t deployed the software needed to actually verify it.

This means that since as far back as 2006, a skilled hacker could alter the data on an e-Passport chip — like the name, photo, or expiration date — without fear that signature verification would alert a border agent to the changes. That could theoretically be enough to slip into countries that allow all-electronic border checks, or even to get past a border patrol agent into the US.

In a “WTF?” letter, Senators Wyden and McCaskill report that the relevant federal staff “lacks the technical capabilities to verify e-passport chips.”

All in, national-security spending is damn near $1 trillion a year. The average annual federal compensation package is somewhere north of $120,000 per worker. And we can’t even properly manage passport control.


Gatekeepers No More

Handing out flags at a naturalization ceremony in Oakland, Calif., in 2013. (Reuters photo: Robert Galbraith)

In the old days of print, when a reporter quoted a press release or other document, you usually had to take his word for it, because hyperlinks did not exist. (The exceptions being bombshells like the Ken Starr report on President Clinton’s frolics, which I remember the Washington Post reproducing in all its sticky detail.)

Today, though, there’s no excuse for not including a link to the full statement, or posting a pdf or jpeg if it’s not already online. Readers should be able to compare the description in the news story with the actual document, and judge for themselves the reporter’s fairness. This is doubly important given the news media’s Stakhanovite efforts at torpedoing their own credibility.

This struck me again looking at yesterday’s coverage of the new mission statement of U.S. Citizenship and Immigration Services. USCIS, the DHS bureau that deals with green cards, work permits, and naturalization (as Charlie can attest) revised its mission statement to stress that it serves the American people as a whole, not the U.S. petitioners and immigrant applicants that were formerly described as its “customers.” What’s more, the new statement does not include “nation of immigrants,” a marketing slogan deployed in the 1950s to promote what became the 1965 immigration law, whose unintended consequences remain with us today.

All the reports I found reproduced and/or linked to the text of the mission statement. So far, so good. But the coverage also quoted extensively from the letter by USCIS director Francis Cissna to his subordinates announcing and explaining the change. But not one report I’ve come across included a link to a pdf or an image of the letter — not the Intercept, which first reported it, not the Washington Post, the New York Times, USA Today, Fox, or CNN. Nor did NPR, even though it did include a link to a press release from lefty hand-wringers bemoaning the administration’s “insidious racism.” It’s not like there’s even anything in the rest of the document that changes the story, it’s just that they don’t get to decide what we should be able to see.

So, to correct this oversight by the media, I include the letter here. I report, you decide.


My American Dream

(Chip East/Reuters)

This morning, at 8 a.m., I did something I’ve wanted to do for as long as I can remember: I became an American.

I first applied for a visa in early 2011, and since then I have slowly worked my way through the system — first as a visa-holder, then as a permanent resident (green card), and, finally, as a citizen. It feels odd finally to be at this point. I decided that I wanted to be an American on my first visit here at age three. Sure, at that point it wasn’t quite clear to me whether there was an America outside of Walt Disney World. But on subsequent visits, of which there were many, I discovered that there really was, and that it was a giant, rambunctious, beautiful place. Since then, I’ve never wavered in my ambition to be of it.

Why? Well, how long have you got? I’ve been sharing my view that this is the last great hope for mankind for almost seven years now. It ebbs and flows as all experiments do, but America continues to serve as the last surviving incubator of the great classically liberal values. If you believe in human freedom, this is your huckleberry. But there’s something more than that to this — something ineffable. I tried to capture this in a cover story back in 2014:

Being asked to explain why I love America is sometimes like being asked to explain why I love my fiancée. There are all the tangible things that you can rattle off so as not to look clueless and sentimental and irrational. But then there is the fact that you just do, and you ultimately can say little more than that.

I don’t know why I love the open spaces in the Southwest or Grand Central Terminal or the fading Atomic Age Googie architecture you see sometimes when driving. I don’t know why merely glimpsing the Statue of Liberty brings tears to my eyes, or why a single phrase on an Etta James or Patsy Cline record does what it does to me. It just does. I have spoken to other immigrants about this, and I have noticed that there is generally a satisfactory explanation — religious freedom, the chance at self-expression, the country’s size — and then there is the wistful stuff that moistens the eyes. Show me a picture of two canyons, and the fact that one of them is American will make all the difference. Just because it is American. Is this so peculiar? Perhaps.

“My fellow Americans.” How sweet that sounds.


An Easily Missed Detail about Sandy Hook Worth Remembering

(Carlo Allegri/Reuters)

There’s a Morning Jolt reader who lives in Newtown, Conn., whose child attended the local high school when the shooting occurred at Sandy Hook Elementary School.

This reader mentioned that he’s spent a lot of time thinking about that day, and he knows that the shooter* attended Newtown High School until tenth grade. The high school stands between the shooter’s home and Sandy Hook elementary; to get from his home, where he first killed his mother, to the elementary school he would have had to either drive past the high school, or take a longer alternate route.

The post-shooting investigation by the Connecticut State Attorney’s office could not determine why the shooter chose to target the elementary school. But that report did mention, “The elementary school may have been targeted because he could overpower people, a dynamic that is very important for mass shooters as they do not want to be thwarted.”

“Why did he drive by Newtown High School — directly, if he took the quickest route, or indirectly, if he took the others?” my reader asked. “I ask myself that question and tell myself it is futile to try to get inside the head of someone who is insane. But then I think — others try, when they come up with various responses to school shootings. And I also think this: There was a guard at Newtown High School, and anyone who attended the school knew it. A potential attacker may think about the possibility of being met by such a guard. Isn’t it possible — likely? — that that thought enters the mind of someone about the carry out such attacks?”

We will never know for certain in that case. But it is a data point worth considering. Madmen who are consumed by the desire to kill a lot of people rarely take police stations or army posts head-on. Targeting those who are helpless seems to be a key part of their twisted power fantasy.

Of course, last night brought the appalling, outrageous news that the armed sheriff’s deputy who remained outside the high-school building in Parkland for four minutes. This shows us that not even having an armed cop on school grounds can guarantee quick action against a school shooter.

* I try not to mention the names of mass shooters, in order to deny them the fame or infamy that they sought.


Take a Tour (d’Horizon)

Former Under Secretary of State Nicholas Burns is interviewed by Reuters, February 8, 2008. (Susan Cornwell/Reuters)

Nicholas Burns is one of the leading U.S. diplomats of our time. For nearly 30 years, he served in the government, in a variety of posts: ambassador to NATO, for example. He had major responsibility for the Arab world, Iran, Russia, etc. He is the ultimate generalist, when it comes to diplomacy and national security. Or rather, he has a number of specialties.

I have done a Q&A podcast with him, here. We met at Harvard’s Kennedy School of Government, where he now teaches. We go around the world, stopping at the most challenging places: the Korean Peninsula, Iran, Russia, Israel, Eastern Europe, Greece (where Burns was once ambassador) — the United States, too. Nick Burns brings a wealth of experience, both practical and intellectual.

I thought of our hour together as a seminar, with no tuition to be paid. Again, here.


Politics & Policy

‘Parkland school cop “never went in” during the shooting. There were other failures, too.’

A woman grieves in front of a cross placed in front of the fence of the Marjory Stoneman Douglas High School in Parkland, Florida, February 21, 2018. (Carlos Garcia Rawlins/Reuters)

It was notable at the CNN forum how defensive and uncomfortable Sheriff Israel was every time Dana Loesch brought up the police failures. Now we know even more why. This Miami Herald piece is a thorough, maddening, wrenching account of all that went wrong and was missed.

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