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Next week we can rehash the vote.
Today we spend some time looking at QE (Quantitative Easing). Pickerhead has always thought this was nonsense on steroids. But, some of our regulars have a more favorable view. First up is James Pethokoukis.
Many conservatives loved pointing to Europe when its debt crisis seemed to be spiraling out of control. A cautionary tale, they said, of what can happen when government spending goes wild. But they had the story wrong, or at least incomplete. Europe’s sovereign debt crisis was as much about slow growth as high debt. Anyway, these folks don’t talk much about Europe any more. And maybe that’s because it is now a cautionary tale of what happens when you combine fiscal austerity and tight money. That’s the exact deflationary formula some have been recommending for America the past few years. And as Europe’s experience shows, that would have been an utter disaster. Economist Michael Darda of MKM Partners: …
Power Line’s Scott Johnson posts a reader’s letter with similar thoughts.
… During the Depression, the Fed did nothing like QE and the Treasury wanted to force liquidation of excess assets and inventories and debts. The result is economic cataclysm, especially in a leveraged economy with a fractional reserve banking system. Banks cannot liquidate and satisfy their depositors need for cash. Deposits are borrowings for the bank. They in turn lend out the money they have on deposit to generate a return, and this pays savers a return. But when an economy goes into recession, this system malfunctions because the credit that originally justified the loan can no longer support it. This is the natural course of the business cycle. But the banking system on the way down is equivalent to the problem of a fire in a crowded theater. Everybody cannot get out at once. Not even close. It’s a fire in a vault really. Those lines of depositors waiting to take their money out cannot be satisfied.
It is easy to castigate the Fed and the Treasury for “bailing out” lenders and management teams, but the truth is more complicated. They were backstopping a system which holds the savings for the vast majority of Americans. As for the continuance of QE, I would revert to the Depression data and again observe that the Fed allowed the money supply to collapse by 1/3. This was devastating to the economy. Allowing monetary contraction through forced liquidation (which is the policy antidote to QE) would be beyond cataclysmic – it would make the Depression or today’s Greece a walk in the park. Unemployment would be 30%, people’s savings would be wiped out all at once – and the beneficiaries would be a tiny fraction of wealthy who would be able to buy assets for pennies from desperate sellers.
The primary criticism viz QE is that we are destroying the dollar and sowing the seeds of inflation. Maybe. But we are currently not inflating. At all. Commodity prices are falling or have fallen dramatically – gold, oil, you name it. The dollar has strengthened viz its alternative currencies, including gold and silver. There may be particular areas of price rises, but that means it’s not a uniform monetary phenomenon. Measured inflation is tame. One of the “inputs” which drives inflation is something called monetary velocity, or the speed with which people spend their money on items. As it did in the depression, it has collapsed. During the depression, it was this particular input which was responsible for the collapse in the money supply. You can think of QE as effectively offsetting the decline in velocity. …
Here’s the Power Line post that the above letter.
We are approaching the end of year six of the regime of Quantitative Easing (QE) engineered by the Federal Reserve under Fed chairmen Ben Bernanke and now Janet Yellen. In place of responsible economic policy to revive economic growth and employment, we have had QE and the explosive growth of job-killing regulations (including Obamacare). In a recent look back at QE, New York Post columnist John Crudele credits QE with some good effects, but adds this inarguable observation, consistent with the avowed goals of QE:
“There’s one more thing that QE accomplished: it has made the stock market soar. Interest rates have remained so low for so long that investors have had no other choice but to move their money into the stock market, thus creating a bubble.
Even those adverse to risk were forced to chase the better yields in stocks, no matter how dangerous that was.
But for every winner in QE there are 99 losers. While the richest 1% of the US population has been loving the rise in stock prices and other QE amenities, Fed policy has been taxing on the masses of savers. …”
For a first, we have an item from Hollywood Reporter. It is an interview with Sharly Attkisson. It is long but interesting. Thankfully it’s the end of the week so there’s time to read it.
Sharyl Attkisson is an investigative journalist who became the story when she quit CBS News after two decades amid allegations that the network refused to run some of her stories that were critical of President Barack Obama. Ahead of the Tuesday release of her book Stonewalled: My Fight for Truth Against the Forces of Obstruction, Intimidation, and Harassment in Obama’s Washington, she spoke to The Hollywood Reporter about her struggles with CBS executives and her assertion that her computers were hacked, possibly by Obama operatives.
Who did you tell at CBS that your computers were hacked?
The first person I spoke to was Washington bureau chief Chris Isham.
Did he believe you?
He appeared to.
Did CBS care? Did they do anything about it?
God, you know, there’s a lot of people there. He seemed to care. He hired a separate computer forensics firm to look at the computers. They, too, agreed that there had been highly sophisticated remote intrusion of my computers. They decided to dig deeper and embark upon a process that spanned a number of months, during which time the situation with the Associated Press and the government spying on Fox News reporter James Rosen was disclosed, as well as Edward Snowden’s NSA information. …
Now for the important stuff. Slate’s Explainer tells us why ghosts say. “Boo!”
… Variations of the word boo—including bo and boh—have been found in books as published as far back as 500 years ago. While the Oxford English Dictionary notes the similarity between bo and the Latin boāre and the Greek βοãv, both meaning “to cry aloud, roar, shout,” it’s unlikely that bo and boo—as nonsensical exclamations—derived from these words. An etymological dictionary of Scottish from 1808 notes that the sound might denote “a sound in imitation of the cry of a calf,” or be related to menacing creatures like the bu-kow and the bu-man (a possible ancestor of the modern bogeyman).
The combination of the voiced, plosive b- and the roaring -oo sounds makes boo a particularly startling word. Some linguists argue that the “ooh” or “oh” sounds can be pronounced at a higher volume than other vowel sounds, such as the “ee” in “wheel.” Since boo is a monosyllable, it can also be said very quickly, which may add to its scariness.
If you want to frighten someone in Spain, you can say uuh (pronounced like ooh in English), and in France you can say hou. A Czech ghost might say baf. In most European languages, including non-Romance languages like Polish, the sound boo is also understood as an attempt to scare someone, but it comes in different spellings.* For example, the Spanish version is written as ¡bú! …