Federal Reserve – Scandals, Politics and Monetary Policymaking

Scandal

Lacker Resigns from Richmond Fed Over Role in Leaking Secret Information

https://www.bloomberg.com/news/articles/2017-04-04/fed-s-lacker-resigns-over-role-in-2012-leak-of-confidential-info
https://www.nytimes.com/2017/04/04/business/lacker-leak-fed.html

Trump and the Fed –

Fed's Challenge, After Raising Rates, May Be Existential

https://www.nytimes.com/2017/03/14/business/economy/fed-opposition-interest-rates.html

Money Shouldn't Choose the Next Fed Chair

https://www.bloomberg.com/view/articles/2017-02-22/money-shouldn-t-choose-the-next-fed-chair

Monetary Rules Debate

The Legislative Push to Mandate Rules-Based Monetary Policymaking in the US: The Latest Salvo in the Long-Running “Rules versus Discretion” Debate
http://www.scirp.org/journal/PaperDownload.aspx?paperID=72991

History

America's Central Bank: The History and Structure of the Federal Reserve

https://www.federalreserve.gov/newsevents/speech/powell20170328a.htm

Monetary Policymaking

Weekend Readings

What is the value of an elite college?

https://www.theatlantic.com/business/archive/2017/04/what-is-an-elite-college-really-worth/521577/

Turkey – A Divided Nation

https://www.theatlantic.com/international/archive/2017/03/turkey-erdogan-kurds-pkk-isis-syria-coup-gulen/521487/

How Does Populism Turn Authoritarian? Venezuela Is a Case in Point

https://www.nytimes.com/2017/04/01/world/americas/venezuela-populism-authoritarianism.html

Caution Signals Are Blinking for the Trump Bull Market

https://www.nytimes.com/2017/03/31/upshot/trump-bull-market-stocks.html

How Utah Keeps the American Dream Alive

https://www.bloomberg.com/view/articles/2017-03-28/how-utah-keeps-the-american-dream-alive

Home Ownership and the ‘American Dream’

History lesson:

https://www.bloomberg.com/view/articles/2017-04-01/the-american-dream-that-s-not-backed-up-by-history

America’s High-School Education System – Barely Rigorous

Anyone who studied in a rigorous A-levels (or equivalent) style high school system or in a German/French/East Asian high school system is often shocked by the ridiculously easy classes offered at American high schools. Here is some interesting evidence on the comparative lack of rigor in the American high school system:

https://www.brookings.edu/research/2017-brown-center-report-part-ii-survey-of-foreign-exchange-students/

“In the 2001 survey, foreign exchange students reported that high school classes in the U.S. seemed easier than classes in their home countries. When asked to rate the relative difficulty of U.S. classes, 56% replied “a lot easier” and 29% said “a little easier.” Only 6% said “a little harder” and 5% said “much harder.” The 2001 American students who had spent time abroad as foreign exchange students agreed, although less emphatically: 29% answering “much easier” and 27% saying “a little easier” when asked how their classes at home compared to those abroad. Of the American students, 13% called U.S. classes “a little harder” and 17% “much harder.” On average, then, American students also judged U.S. classes as easier….

Students from abroad are even more likely today to describe U.S. classes as easier than they were in 2001. The combined “much easier” and “a little easier” responses grew from 85.2% in 2001 to 90.0% in 2016. The change in the “much easier” rating, increasing from 55.9% to 66.4%, is statistically significant. Considering the rhetoric of U.S. curriculum reform over the past 15 years—the calls for higher standards, more rigorous coursework, deeper learning, and stronger preparation for college—these results are surprising.”

The Future of Democracy

A thought-provoking piece:

http://www.bbc.com/future/story/20170330-the-uncertain-future-of-democracy

Economics and Healthcare

A great piece from Adam Davidson:

http://www.newyorker.com/business/adam-davidson/what-the-g-o-p-doesnt-get-about-who-pays-for-health-care

“When gross domestic product was first defined, in the nineteen-forties, by the economist Simon Kuznets, the goal was to find one simple measure that could serve as a thermometer for the economy: when the number rose, things were probably going better than when the number fell. Kuznets, of course, knew that this was an oversimplification, but a helpful one. Of all the countless ways people make and spend money, Kuznets identified three categories that he believed could cover everything: consumption, investment, and government spending. (He also included exports and subtracted imports, to limit G.D.P. to economic activity within one country, but that’s another story.) When he devised the number, health-care expenditure was minuscule, making up about 0.4 per cent of the over-all G.D.P. There seemed no reason to carve it out as its own category. Today, health spending makes up more than seventeen per cent of G.D.P. That spending is divided into the major categories. You “consume” cancer treatments or a checkup or a week in the hospital. A hospital might invest in a new M.R.I. machine or a cardiac-treatment wing. And the government spends money through Medicare, Medicaid, and the Department of Veterans Affairs, among other ways. Health care is the single largest government expenditure by quite a lot, typically nearly double the defense budget. However, dividing health expenditures into these categories misses an important economic reality: health-care spending has a substantial impact on every other sort of economic activity.”

Deleterious Effects of Lobbying

Powerful industry lobby groups have extraordinary influence on US policymaking:

https://www.theguardian.com/technology/2017/mar/28/privacy-protection-sell-web-browsing-history-data

https://www.bloomberg.com/news/articles/2017-03-29/republicans-take-aim-at-california-s-retirement-dream