Washington and Wall Street are hyperventilating over Trump's comment yesterday on the Federal Reserve interest rate decisions: “I feel the president should have at least [a] say in there, yeah, I feel that strongly.”
While we believe in Fed independence of political considerations, it is also dangerous that a bunch of lawyers and ivory-tower PhD economists can control the money supply and raise taxes (inflation is a tax) without ANY accountability to anyone - least of all the voters. To borrow the left's favorite phrase: that's a danger to democracy.
It's not as if the Fed is any fountain of wisdom. It was Jerome Powell and his colleagues who accommodated the Biden-Harris spending spree and allowed inflation to rise to 9.1% in the summer of 2022. Sounds like they took their hands off the steering wheel.
It was the Fed that almost sent the economy into a tailspin in late 2017 with interest rates way too high for way too long - and Trump was right to fume at this error.
It was the economic wizards at the Fed that held rates too low for too long in 2006, 2007, and 2008 and caused the greatest financial meltdown since the Great Depression.
It was the Fed that allowed prices to nearly triple in the 1970s until Reagan and Volcker saved us.
The 300 PhD economists sitting in the temple of the Fed have a less-than-stellar track record.
Worst of all, the current interest rate-setting policy has created an entire needless industry of Fed watchers who make a living speculating on what the Fed will do next. That creates an uncertainty that reduces growth.
Trump's idea of allowing the White House to have a bigger voice isn't the solution either.
The solution is to take away the Fed's exalted powers by requiring them to have a price rule to set interest rates - and stop worrying about things a central bank can't control, such as unemployment, social injustice, or climate change.
One sensible rule would be to use commodity prices as the gage. By holding commodity prices stable, we would have a stable and a strong dollar. Only in an economic emergency – declared by Congress and the President – should the Fed deviate from this rule.
2) Desantis Scorches Walz for His “Snitch Hotline”
We’ve mentioned that few governors had a worse record on COVID response than Tim Walz. Not only did he militantly lockdown Minnesota businesses, churches, and schools for more than six months, but he established an Orwellian phone line – aka “the snitch hotline” – encouraging people to report if they saw neighbors outside violating social-distancing orders.
Congratulations to Florida Governor Ron DeSantis – the real Freedom Governor – for his attacks on this deeply disturbing police-state response – especially when Kamala and Walz are laughably touting themselves as the “freedom” ticket.
Our blast out earlier this week about natural gas being the future of energy markets has generated a lot of feedback from readers – which we love.
Most responses indicate that we actually UNDERSTATED the case for nat gas. These two charts from energy expert par excellence Robert Bryce offer even more powerful evidence of the powerful case for natural gas for the next several decades at least.
This chart shows that in the last two decades green energy – despite hundreds of billions of dollars of taxpayer aid – has lost ground relative to natural gas:
4) Why Are Some Republicans Defending Green Energy Boondoggles
A handful of House Republicans are supporting Biden’s $370 billion Green New Deal bill, because it brings tax dollars to their districts.
In a new letter to Speaker Mike Johnson, 18 mostly northeast Republicans have asked him not to repeal the energy tax credits that are part of the Green New Deal. They argue that eliminating the credits would jeopardize the investments they've made because of the bill's promised payments.
Sorry. Private companies are not entitled to billions of dollars of taxpayer money for worthless projects. And members of Congress have a duty to protect the public purse – not raid it.
For the record, the letter was signed by Andrew Gabarino (N.Y.) David Valadao (Calif.), Lori Chavez-DeRemer (Ore.), Marc Molinaro (N.Y.), Erin Houchin (Ind.), Anthony D'Esposito (N.Y.), Mike Lawler (N.Y.), Nick LaLota (N.Y.), Young Kim (Calif.), Jen Kiggans (Va.), John Curtis (Utah), Don Bacon (Neb.), Tom Kean Jr. (N.J.), Dave Joyce (Ohio), Mariannette Miller-Meeks (Iowa), Juan Ciscomani (Ariz.), Mark Amodei (Nev.) and Buddy Carter (Ga.).
5) Google Found Guilty of Being the Most Popular Search Engine
Earlier this week a federal judge declared that Google is a monopolist. But as our friends at the Wall Street Journal editorial board note, it is a very strange monopolist, known not for harming consumers but for helping them:
"Google has not achieved market dominance by happenstance. It has hired thousands of highly skilled engineers, innovated consistently, and made shrewd business decisions," Judge Mehta writes. "The result is the industry's highest quality search engine, which has earned Google the trust of hundreds of millions of daily users." ..
Startup Duck Duck Go also "made a bid to be the default for private browsing mode searches on Safari," but neither it nor Microsoft "succeeded in part due to their inferior quality."
This makes for a very strange monopolist--one that does better by consumers because its search engine is superior. "Google's partners value its quality, and they continue to select Google as the default because its search engine provides the best bet for monetizing queries," the judge explains, adding that Google "has continued to innovate in search."
We at Unleash Prosperity have had problems with Google’s search engine algorithms, but this is a private company that owns its products and services. God forbid that government starts treating it like a public utility and search engines become regulated by politicians.
It’s hard to see how any court-ordered remedy could benefit consumers when the "monopolist" is already providing them a product they freely choose (there are dozens of alternative search engines) at a price that is FREE.
