Federal Reserve arrives at precipice

Lisa Cook

We are consumed these days by this thing called the "Federal Reserve." All our hopes and dreams seem invested there. An upcoming meeting of the "FOMC" is anticipated with such great scrutiny. Let's face it, we always want another "rate cut." 

We especially want to see the Fed chair speaking into microphones with a pledge or prediction of lowering interest rates. Is achieving happiness so simple? You would think so, if you sample representative media outlets and commentary on a given day. 

The very existence of "the Fed" ought to mystify us. The organization comes at us out of a netherworld where there appears to be no accountability. I mean, who do these people really answer to? Is it a netherworld of high finance or clever big bankers? Who we are simply supposed to trust? Where does all this power spring from? 

None of these people are elected. But the message each day from the media is that our very lives hang in the balance with what "the Fed" does. Should we at least be asking more questions? My prime question would be about this assumption grounded into us by the media: lower rates are always good news. 

The Speaker of the House talks about needing to "help first-time homebuyers." Sounds like a worthy aim. My first reaction would be: Do you realize how expensive it's getting to be to even own a single-family home? This makes me further ask: If someone bequeaths you a house, should you even be happy about it, or should you gnash your teeth? Step onto the premises and immediately start a list of all the ways you'll have to put money into the house. What kind of shape is the roof in? That's just the first question. 

There was an attempt in North Dakota to get rid of the property tax. If the Republicans don't shift course and really provide property tax relief, then the measure will come up again and this time it will pass. And of course Republicans tend to be against it. I mean the real wealthy and powerful ones, I mean like Doug Burgum. 

And that's because the property tax is regressive. It hits the common folk especially hard. 

It is the Republicans who have been pushing the idea of a national sales tax. They'll offer a figure of about 30 percent. This would accomplish getting rid of the income tax which drives Republicans nuts. 

And the president - I'll have to bring up that subject - wants to use tariffs to replace the income tax. Tariffs to replace taxes. Would serious economists say that's credible? 

But hey, tariffs are a consumption tax on the American people. And it's yet another regressive tax idea. One on top of another. And y'all can't recognize that? Are not alarmed by it? Even when it affects your own financial well-being? 

I shouldn't assume that many of you are middle class or lower. Yes let's not forget about the "lower." We judge the character of a society by how well it treats its most economically deprived members. Any of you could end up there. 

The president of the U.S. has his own bond investment that would take off like a rocket from a launching pad if interest rates get pushed down. And the president is frantically pushing for that, pulling out all stops. He tries to get a Fed board member removed. He's instinictively skeptical of her because she's black. I don't hear the term "African-American" much anymore. Has it fallen out of favor? 

This morning (Friday) we got the headline about how Trump is once again going to the Supreme Court, this in order to try to get Lisa Cook fired. 

Trump casts a dreary sort of pall over America these days because of how he wants to "rub out" so many people. To intimidate so many people. Why should he care about what a late-night TV comedian says? And he suggests he'd like to revoke Rosie O'Donnell's citizenship. Why does he engage in such talk at all? And he's in position to get his way so much. 

 

Eyes on "the Fed" 

So, what happens if DJT really in effect takes over the Federal Reserve? We may well be headed in that direction. Surely we'll be headed in the direction of "free money" again. We'd be lucky to escape disaster. 

The relationship between inflation and interest rates is not completely known. Like I said, the Fed comes out of a sort of netherworld. We can't exactly connect the dots. And are these the kind of people that the broad swath of Americans can really trust? I would trust Lisa Cook before Donald Trump. 

If we get bad news about how low interest rates aggravate inflation, how could our country recover? Is this a truly "existential risk" for our nation? Will the Supreme Court really truly let Trump fire Lisa Cook? Because if he does remove her, and if he gains control of the central bank, it could be "game over" for our once-blessed nation. We will no longer be the nation that my father fought for in WWII. We'll be like Italy under Mussolini. And you know what happened to him: he was captured by the communists when he was trying to flee the country. The communists killed him and had his body hung up on meat hooks for abuse. 

The powerful can fall. The inflection point is when people have trouble getting enough to eat. At a certain point they cannot be pacified any longer.

 

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