Instability with interest rates an omen?

So many cheerleaders for "rate cuts"

We're into June and the rhythm of the seasons continues. Is it reassuring for you? Or do you begin making your rounds each day scared of discovering the higher prices for everything? Inflation does not come out of the ether. Economics is a science and there are causes. 

I grew up during the very pernicious 1970s inflation. Eventually we discovered there was a solution, as Paul Volcker took over at "the Fed." He made us take our medicine. He pushed up interest rates one whole point sometimes. Oh, a lot of people bemoaned that of course. Inflation got snuffed out so completely, it became rather out-of-mind. But I never forgot what we had been through. 

And I had to be thankful for one thing: my certificates of deposit at the banks performed quite well during the period of "taking our medicine." I'll sometimes bring this up when I'm around people like at church coffee, and people can be resentful. Even in the present time they might make a face. 

I guess the farm crisis of the 1980s was a pretty serious thing. I had no influence to affect anything but I did have some CDs in the banks. 

 

Uncertainty

Wouldn't it be ideal if we didn't have to gravitate to extremes? I stopped acquiring Meals on Wheels because I was asked to fill out a form. The government always seeks data, even government under conservative leadership. Maybe especially government under conservative leadership. 

The form asked me my income. Well that's a problem. 

For a while I was able to get some pretty good "CD specials" at the banks. Interest rates floating up around five percent in fact. Well I'll take the best I can get. But you know what the norm has been over the last few years. Quite a few years actually, even going back to Obama. We had the "2008 financial crisis." Odd type of crisis because it was not an act of God. It came on because of the fallibility of human beings. 

Mistakes? Or shifty moves prompted by greed? Was there substantial incarceration of the guilty parties?  Well no. We saw this in Iceland which had women in powerful positions in government. We needed that here. Instead the "good old boys" with their status and deep pockets just bamboozled us. 

Hank Paulson, former treasury secretary

So on comes Hank Paulson holding his three sheets of paper with hands trembling. Time for TARP. The well-heeled crowd had gone to the usual well for support. Well, a "bailout." And of course that well was the government. I laugh. Who else was going to support these people? Where else could they go? The Federal government can create new money. Bring on "quantitative easing" or "QE." 

The high rollers of Wall Street act like they are such conservative folks. Heaven forbid anyone comes forward as "liberal." As conservatives they decry "big government" and government spending. But when the excrement hits the fan for them? We know the routine, all carefully cloaked in rhetoric that makes it sound necessary. George W. Bush got bamboozled but that shouldn't surprise us. He told us that "economic advisors" told him that without the bailout and QE, "our economic system would collapse." 

I looked around me at the routine of our local businesses and professional people and it seemed life was going on as usual. So everything was going to "collapse?" That's what Bush told us. Was that really the fear, or were the well-heeled elite folks wetting their pants over getting crushed in "the stock market." 

Ah, the stock market. When I was a kid you didn't hear the common folks talk about the stock market. They knew about it but did not think it was their thing. They figured it was a "playground" for the rich people. This implies that rich people didn't care about being careless with their money. The opposite is true: rich people pull every string to guard their wealth. Such folks knew where to go when the storm clouds of this apparent "financial crisis" formed in 2008. Do we really know how bad things were? The media just began hitting us over the head with this notion. Today we'd call it a "meme." 

So there stood Hank Paulson with hands trembling as he held the three pieces of paper for the bailout. Mostly we saw America shrug about this. "Well, just one of those things." "You know how it goes." 

 

Terrible for savers

So we got this extended period of QE where people with money "in the bank" simply got screwed. Then upon the re-opening after the worst of covid, we got the stimmy checks which experts said would cause inflation. This led to a major upswing in what banks could offer savings customers. But to take advantage, you had to sign up for this thing called a "CD special." And yours truly had to twist arms to get paid monthly interest instead of "annual" or "at maturity." 

I have had some good results from this. But it could all come to an end quickly. Our president is really strong-arming "the Fed" to try to get interest rate cuts. This totally violates the unwritten rule about how the president isn't even supposed to talk about the Fed. Well, so what? The U.S. was stupid enough to elect Trump twice! So why care about any unwritten rules in Washington D.C.? 

Hey, let's throw the baby out with the bathwater. And heavens, what is this all going to lead to? 

I thought "conservatives" were free-traders. But we have a president with an absolute tariff fetish, so unstable with the application that it is pure comedy. 

"TACO?" 

The president's trick is to divert and distract enough to keep a certain type of (mainly male) American supporting him. He advises Republicans "don't talk about 'trans' until a week before the election." 

He's right for getting Republicans elected. But will the U.S. under his leadership turn into a house of cards? Really, are you prepared for that? Prepared for the ramifications of tariffs and possibly plunging interest rates? More inflation without a doubt. 

And this while scores of the working poor will lose Medicaid? People will probably declare personal bankruptcy which means the health care providers/professionals won't get their money. Obviously DJT does not care. 

Has our own congressperson Michelle Fischbach ever second-guessed anything that DJT has done or said? Even once? So you're all good with this? You must be. You probably get reinforced when you attend church on Sunday. Republicans win on the cultural issues. This is their trump cared so to speak. 

We completely put aside the science of economics. We completely disregard how the cutting of Medicaid and even Medicare is going to have calamitous outcomes. But as Joni Ernst reminded us, showing Republican wisdom, "we all die." So let's get on with it.

- Brian Williams - morris mn minnesota - bwilly73@yahoo.com