Limits to Overused Fiscal and Monetary Policy Can Result in Self-Induced Governmental Impotence

“The [U.S.] federal budget deficit is growing faster than expected as President Trump’s spending and tax cut policies force the United States to borrow increasing sums of money.”[1] This observation was made just after the Federal Reserve Bank relented under pressure from the White House to lower interest rates because bond investors had been investing with a possible future recession in mind. With the U.S. Government’s accumulated debt standing at $22.4 trillion and interest rates already low, the limits to both fiscal and monetary policy were apparent even if most Americans in the political and business elite were focused on avoiding a possible recession in 2020.

The full essay is at "Overused Fiscal and Monetary Tools."

See also: Skip Worden, Essays on Two Federal Empires. Available at Amazon.

---

1. Jim Tankersley and Emily Cochrane, “Budget Deficit Is Set to Surge Past $1 Trillion,” The New York Times, August 22, 2019.

Anticipating a Recession: Economic and Political Indicators in the E.U.

Anticipation in August, 2019, at least among bond purchasers on Wall Street, of an impending recession in 2020 had at least in part to do with the E.U. In particular, a large state, Germany, had a disappointing second quarter in terms of contracting economic output, and the increasing prospect of Britain seceding from the Union was thought to result in the E.U. economy turning recessionary. I contend that both of these baleful indicators were over-emphasized. Additionally, adding the increasing political polarization in the E.U. as another contributor to an upcoming recession would be too much.

The full essay is at "Anticipating a Recession."

When Platitudes Undermine Real Change: The Case of U.S. President Obama

U.S. President Obama’s 2010 speech at the UN’s annual opening lacked tangible proposals.  For example, he urged progress on the Middle East peace talks, but proffered no proposal.  He said Africa could be prosperous agriculturally, but gave no proposal for how.  He claimed that corruption in governments of developing countries is a problem, but offered no solution.  Pointing to corruption in general diffuses responsibility so talking about it does not shame anyone into making hard choices. Such platitudes belied the president's claim to being an advocate of real change. 

The full essay is at "Platitudes Undermine Real Change."

On the Role of Partisan Political Ideology in the U.S. Supreme Court

Observing a pattern of sustained ideological proclivities in the decisions of justices of the U.S. Supreme Court, The New York Times editorialized in 2011 that the “court cannot maintain its legitimacy as guardian of the rule of law when justices behave like politicians.”[1] One could just as easily say behave like human beings, for juridical interpretation itself contains ample space for an interpreter’s ideology to have a role, especially given human nature that is apt to exploit such leeway. In other words, ideology may be part and parcel of the essential function of a constitutional court, given the nature of juridical interpretation. 

The full essay is at "Partisan Ideology in the U.S. Supreme Court."

1. The New York Times, “Ethics, Politics and the Law,” Editorial, July 1, 2011, p. A22.

Raising Retirement Ages in the E.U.: The Case of Spain

The New York Times reported in 2012, “Spain has a stubbornly high budget deficit, its banks require tens of billions of euros in rescue loans and the government may soon have little choice but to request bailout funds” from the E.U.’s “TARP” program. Nevertheless, the state government’s “budget would actually increase pension payouts 1 percent [in 2013]. The money includes not only pensions for former public employees, but also the social security payments that go to all retired [residents].”[1] Pension expenditures represented nearly 40 percent of the state's budget and 9 percent of the state’s economic output, so one would think that line-item would have been first up on the chopping block. To be sure, cutting sustenance programs such as pensions could actually exacerbate a government's debt because if a resulting decline in demand adds to unemployment. In this case, the politics in the state seems to have gone along with the economics. I submit that Spain could have gone further economically were it not for entitlement politics interlarding the retirement-age issue.

The full essay is at "Raising Retirement Ages in the E.U."

1. Landon Thomas, “Pension Dilemma in Europe’s Debt Crisis,” The New York Times, September 30, 2012.

Stock Market Efficiency: Regulating Speed Trades

A flurry of international activity aimed at putting limitations on computer-based speed-trading was striking during the Fall of 2012 in the U.S. because regulators had been slow to act. Typically, the NYSE has been viewed by the world as the Mecca of efficient investment markets. Paradoxically, however, efficiency may be improved by restricting—meaning regulating—the masses of computer-enabled quick trades that take advantage of momentary microscopic arbitrage opportunities that are too quick for the human hand. The American conventional wisdom seems to be that regulation and market-efficiency are inversely related, rather than complementary. This assumption might be overly simplistic, coming from an inherited ideology. Fortunately, the rest of the world has not been following the SEC.

The full essay is at "Stock Market Efficiency."

Managers Going too Far: Targeting Linguistic Over-Reaches

The practice of using words beyond their contexts such that the words’ meanings are tortured and yet are pretended not to be was a trend in modern America during the 2010’s. The business manager instigated the trend in order to “gild the lily,” which means to claim more than is warranted or merited. Astonishingly, people dismissed or perhaps even didn’t recognize such over-reaches. Perhaps as long as people have used language, egos gripped in the pursuit of gain have presumed that keeping to a word’s extant meanings in a language is somehow optional.

The full essay is at "Managerial Over-Reach."

Beyond Fixing the U.S. Government's Debt

After a number of failed attempts over decades to solve a problem, it is natural that the problem itself would barely get mentioned, let alone any cure. I submit that the U.S. federal debt is a case in point. President Reagan made it an issue in 1980, and Congress has tried to mandate for itself automatic spending cuts and tax increases, but to no avail. The desire for instant gratification outstripped self-discipline. This could perhaps be said of the society generally. 

The full essay is at "Beyond Fixing the Debt Problem."

Corporations and Political Debate: Taxation & Regulation

Under U.S. law, the corporation is a legal person, whose wealth can constitute political speech protected by the first Amendment. It is no matter that the corporation is an artifice constructed by the state for economic purposes: to concentrate wealth in order to produce goods or provide services. That such an entity would lobby and spend money (or “speak”) for political purposes may from this standpoint seem strange, or out of place. To be sure, political influence can indeed help the bottom economic line, but is a corporation a political actor if the purpose is economic? 

The full essay is at "Corporations and Public Debate."

On the Pull of Religious Belief

John Blake of CNN asks, “Have you ‘walked the aisle’ to ‘pray the prayer?’ Did you ever ‘name and claim’ something and, after getting it, announce, ‘I’m highly blessed and favored?’ . . . If this is you, some Christian pastors and scholars have some bad news: You may not know what you’re talking about. They say that many contemporary Christians have become pious parrots. They constantly repeat Christian phrases that they don’t understand or distort.”[1] Making matters worse, such Christians treat their religious beliefs as if they constitute knowledge. This, as well as the presumed wherewithal to claim anything due from God, is highly impious and yet the claimers are certain that they have true belief.

The full essay is at "Religious Belief."

---

[1] John Blake, “Do You Speak Christian?” CNN, July 31, 2011.

On the Political Power of Capitalism in American Society

In his confidential memorandum, “Attack on American Free Enterprise System,” Lewis Powell, later to be a justice on the U.S. Supreme Court, wrote in 1971 that the “leftists” were launching a frontal assault on the “free enterprise system,” “capitalism,” or the “profit system.” Powell saw this as an attack on rather than a defending of the “American political system of democracy under the rule of law.” That the corporate profit-interest might be a threat to “one person one vote” apparently did not occur to the future Justice. Rather, what is good for GM he presumed must be good for American democracy. Moreover, both, he presumes, are consistent with, or perhaps even foundational for, American values.

The full essay is at "On the Political Power of Capitalism."

“USA!” at Ryder Cup 2012: Silent “EU!” Wins

The Ryder Cup of 2012, held in Illinois, can be read as payback for the European team at the expense of the Americans because the latter had come back from the same 10-6 deficit to win at the previous Cup.  The Associated Press reported that the European team’s “rally was even more remarkable, carried out before a raucous American crowd that began their chants of "USA!" some three hours before the first match got under way.” I can just imagine the looks on the Europeans’ faces amid the primal shouts some three hours before play. “Why are they doing that now? Should we get our few people in the crowd to start pumping their fists in the air while shouting “EU! EU! EU! EU!”? I can just hear a German on the team (if there was one) ask, “But what purpose would that serve?” A Brit would interrupt to make his observation known, that he cannot take part in such a cheer as it diverts from “hip hip!” and thus may interfere with being proud to be British, as Maggie used to say. A Belgian of Flemish and Walloon parentage (if such a thing exists) would try to split the difference in proposing that the small crowd of European groupies chant “hip hip EU!” The Brit would undoubtedly veto that one in a split second and the European team would be left with having to listen to the primal chants of the Americans. Of course, the warlike chant has no meaning in itself. Even a patriotic American would wonder why in the midst of a fireworks show on July 4^th young men (16-25ish) suddenly feel the need to aggressively shout “USA!

                                     Europe's Martin Kaymer celebrates Europe's win at the Ryder Cup.     Reuters

USA!” as if the exploding bombs (i.e., fireworks) were some signal known only to them that we were about to invade another country. I witnessed this at a Fourth-of-July fireworks at an upscale golf course in 2012. The chants seemed so out of place, coming out of nowhere, that I could not help but wonder what was behind the impulsive act.

The full essay is at "USA!, Silent EU!"

Starbucks Capitulates to Overzealous Police Union in Spite of In-Store Intimidation

On July 4, 2019, six police employees staggered by twos into a Starbucks store in Tempe, Arizona (which borders Phoenix to the west). Because they did not come in together, customers had a prolonged sense of a police presence throughout the store. Eventually, the police huddled near the bar where drinks were left for customers to pick up. Even as the police huddled, they did so with eyes strategically perched so as to maintain visuals on the customers. Yet this was apparently lost on the police themselves, who felt it was disrespectful for an employee to ask them to leave after a customer complained about feeling uncomfortable. It could not be assumed that the customer had had bad experiences with police in the past, for any customer would understandably feel uncomfortable with so many visible guns passing back and forth. Indeed, for the police to treated the customers to the display can be reckoned as disrespectful!  Unfortunately, the police probably had no recognition of having too many at once in the store because intimidation as a deterrent by a very visible, ubiquitous presence in the public (and apparently in restaurants) was at the time the standard tactic. In short, customers could be expected to feel uncomfortable, or at least to want some relief from the ubiquitous police presence. Even so, Starbucks apologized because an employee acted on behalf of a customer, whose complaint was valid given the overwhelming police presence in the store. Yet according to the Tempe Association of police, the customer and employee should have known that some of the cops were veterans so the errant conclusion is zero respect for vets.[1] The association was so busy feeling disrespected that no thought at all went into why customers could rightly feel uncomfortable with so many police in a small store.

The full essay is at "Overzealous Police Presence."

1. Amir Vera, “Starbucks Apologizes after Six Officers Say They Were Asked to Leave a Store in Arizona,” cnn.com July 6, 2019.

Interestingly (or tellingly), the police chose to leave rather than move away from where customers pick up drinks, and yet the police chief felt that Starbucks had disrespected the police in the store. 

Presidential Authority and Bureaucracy: Regulatory Agencies

Circulating in Congress in the fall of 2012 was a bill that would have allowed "the White House to second-guess major rules and mandate that agencies carefully study the economic effects of new regulation. The change could, in effect, delay a number of rules for the financial industry. Those who support preserving the status quo where Wall Street regulates itself will find much to like in this legislation," said Amit Narang, a regulatory policy advocate at Public Citizen, a nonprofit government watchdog group.[1] President Obama had received $1 million from Goldman Sachs as a campaign contribution in 2008. Yet of how much value to Wall Street is a mere delay in regulation? Some, surely, but not enough to make this the decisive issue here. Rather, I submit that the president's control as chief executive of the regulatory agencies and the added bureaucracy are more salient in this case study. 

The full essay is at "Presidential Authority and Bureaucracy." 

1. Ben Protess, “Lawmakers Push to Increase WhiteHouse Oversight of Financial Regulators,” The New York Times, September 10, 2012. 

President Obama's Justification for Limited Military Intervention in Libya: Driving a Wedge between the Bushes

In the early evening of March 28, 2011, President Obama addressed the American people and the world to explain his administration’s involvement in the international coalition that had been implementing a no fly zone over Libya while protecting Libyan civilians from their own ruler. He sounded much more like the first President Bush than the second in terms of foreign policy.  Similar to how the elder Bush had restrained himself from going all the way to Baghdad after he had joined an international coalition in removing the Iraqis from Kuwait, Obama said that directing American troops to forcibly remove Colonel Qaddafi from power would be a step too far, and would “splinter” the international coalition that had imposed the no fly zone and protected civilians in rebel areas of Libya. Interestingly, in taking the elder Bush’s route, Obama came out strongly against that of Bush II. Referring to the alternative of extending the U.S. mission to include regime change, Obama stated, “To be blunt, we went down that road in Iraq . . . regime change there took eight years, thousands of American and Iraqi lives, and nearly a trillion dollars. That is not something we can afford to repeat in Libya.”[1] In effect, Obama was exposing a fundamental difference between George H.W. Bush and his son by saying essentially the same thing as the elder Bush had done while excoriating the foreign invasion of his son. Yet Obama did not stop there. He added a theoretical framework that the elder Bush could well have used.

The full essay is at "U.S. Justification for Limited Military Intervention."

---

[1] Helene Cooper, “Obama Cites Limits of U.S. Role in Libya,” The New York Times, March 28, 2011.