After having been in inflation denial over the past year, the ECB has finally taken some tentative measures to address the inflation problem. It announced that beginning on July 1, it will cease its bond-buying activities and will raise interest rates by 25 basis points. It also announced that it will again raise interest rates at its September meeting, perhaps by more than 25 basis points depending on how inflation develops.
While the ECB’s move on interest rates at least constitutes a start to what is likely to be a long interest-rate-hiking journey to regain control over inflation, it is far from obvious that it will make much of a dent on inflation. After all, even after the ECB’s proposed move, the ECB’s interest rates will still remain a negative 25 basis points — at a time when inflation is above 8 percent.
Representatives Rodney Davis (R., Ill.) and Jake LaTurner (R., Kan.) write about welfare reform:
It’s time to fix welfare again. Since the historic reforms of the 1990s, welfare has been steadily divorced from work once more. Today, hardly anyone on welfare is required to pursue employment or an upward path in life. Not only is this disastrous for welfare recipients themselves, but it’s also driving America’s record worker shortage. On June 9, we introduced two bills that will restore a welfare system that works in every sense of the word.
Rainy-year funds and the rule of law in monetary policy are just two ways to prevent abuses of future crises. People have already suffered enough this century from terrorist attacks, a financial crisis, and a pandemic. Hasty, expensive “flash policy” made things worse each time. When the next crisis hits, people will be better off if they have some institutional safeguards against flash policy. The time for an Abuse-of-Crisis Prevention Act is now.