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The next mayor of New York

The next mayor of New York City, the center of American capitalism, will be the young socialist Muslim assemblyman Zohran Kwame Mamdani. He was born in Uganda. His father is a chaired professor of anthropology at Columbia and mother is a filmmaker. His father argues that Israel is not a true state but a settler colony synonymous with the genocide of the Palestinians. Mamdani – like his father – is a virulent hater of Israel in the US city with the highest Jewish population. He wants to defund the police in a city where 80 percent of the hate crimes are against its twelve percent Jewish population. Will Orthodox Jews be safe during his reign?

His platform includes freezing rent, building 200,000 rent-stabilized units of “affordable” housing, eliminating fares on all city buses, creating a Department of Community Safety, creating city-owned grocery stores that will pay no rent or property taxes, free childcare, distribution of baby baskets to parents of newborns (which would include diapers, baby wipes, nursing pads, post-partum pads, swaddles, books and local resource guides), raising NYC’s minimum wage to $30 by 2030, regulating delivery apps like DoorDash, GrubHub and Uber Eats, ensuring equal distribution of money and resources to city schools, creating car-free “School Streets,” expanding the Bronx pilot Every Child and Family Is Known program to address homelessness in the school system, investing in the CUNY system, renovating 500 public schools with renewable energy infrastructure and HVAC upgrades, making asphalt school yards into green spaces, proposing a 2% tax on residents earning above $1 million annually and raising the corporate tax rate to 11.5%, fighting “corporate exploration” by banning hidden fees and non-compete clauses, fighting misleading advertising and predatory contracts, limiting tax dollars given to companies under NDA agreements and funding challenges to ConEd’s price increases, resisting Trump by strengthening sanctuary city protections, ending cooperation with Immigration and Customs Enforcement (ICE) and barring them from city facilities, increasing legal support for migrants, preventing personal data from being given to ICE, protecting abortion rights, increasing the budgets of the NYC Department of Consumer and Worker Protection and the NYC Commission on Human Rights. Whew! Did I miss anything?

Mamdani somehow thinks that all this will be paid for by the new tax hikes which he says will raise $10 billion. First, we know that is not going to happen. Most likely any tax increase will raise less. Rich people hire accountants to circumvent any increase (Harold Black’s First Law) and many will leave the city. Several have said that when Mamdani takes office, they will leave. One large grocer said that he will close his New York stores if government stores are opened. Second, $10 billion has got to be on the wildly low end of how much all this will cost. Simply look at the cost of building 200,000 new “affordable” union built housing. That is probably more than $10 billion. Third, New York’s mayor does not have the unilateral authority to raise taxes or do most of the things that Mamdani has promised. He will have to get all of this passed by the state legislature and blessed by the governor who has said “no new taxes.”

In a saner world, someone making all these promises would have been laughed out of town. One would think that voters would see all of this BS. Also one would think that only the uninformed, the less educated, the less “sophisticated” voter, the poor, the dispossessed, the homeless, those on public assistance and those in less affordable housing would vote for this bill of goods. But no. Mamdani’s support was among young college educated white voters. Naturally he fared poorly in Jewish areas of the city with his “globalize the intifada” rhetoric. Cuomo outperformed him in older neighborhoods and in neighborhoods with those without college degrees. Cuomo did better among blacks and Latinos – groups that one would have assumed a priori would be the beneficiaries of Mamdani’s largesse. As to the boroughs, Mamdani carried Brooklyn, the most populous borough with its 2.6 million residents. My youngest granddaughter lives in Brooklyn. I wonder how she voted? Cuomo carried the Bronx and Staten Island. Mamdani won Manhattan and Queens – not surprising since he represents them in the state legislature. Mamdani outperformed Cuomo among Asians and Muslims. He also did well among Latino voters. One wonders if the vote for Mamdani was not a repudiation of Cuomo and Eric Adams and due in large part to the “education” now being foisted by the socialist teachers’ unions K-12 and the liberal arts instruction in our universities?

One local politician says that Mamdani represents “the next generation of Democratic politics.” But does he? Is the next generation of democrats a bunch of socialists who promise everything but deliver nothing? We will see. Thus far only one elected democrat in New York has condemned his election. The rest including Kathy Hochul, Hakeem Jeffries and Chuck Schumer, himself a Jew, have all muttered appropriate clucking noises devoid of criticism.

New York will prove to be another lesson learned since socialism always fails. But like Dracula, socialism always rises from the dead. Socialism fits perfectly what my father would often say, “It sounds good – if you are interested in sounds.” Again, the saying of “those who do not know history are doomed to repeat it”should instead be “those who know history are still doomed to repeat it.”

I turned 80 on July 3rd and gave myself a birthday dinner with family and close friends. My family came in from California, Gray Georgia, Virginia, New Jersey, New York and Atlanta. The great Hallerin Hilton Hill, the wonderful radio talk host who is one of my dearest friends surprised me with this video. Enjoy!

https://thelifeofharoldblack.com

Happy Independence Day America!

Two hundred and forty nine years! That is 249 years of being the world’s greatest and most successful demonstration of the powers of individualism, freedom, less intrusive government, private property and initiative. Thank you, England for providing the model to the founding fathers as to what a government should not do. Thanks to the brilliance of the founding fathers (now call The Founders) of crafting the wonderful Declaration of Independence and the even more brilliant Constitution of the United States. Faced with the schisms between the abolitionists in the north and the slaveholders in the south, the founding fathers wrote a constitution that could unite the fledgling country while still laying the foundation that would ensure one day that all would truly be equal in the eyes of the law. This marvelous document would hardly have been written by today’s politicians who lack the written skills, the verbal skills, the intellect and the morality of our founders.

But “Happy Independence Day”? Not Happy Birthday? Ever wonder why we celebrate July 4 as the “birthday” of the country? Why isn’t it January 14th? Well January 14, 1784 was when the Continental Congess officially declared the sovereignty of the country. July 4, 1776 was when the Continental Congress formally adopted the Declaration of Independence. So saying the July 4 is the birthday of the country is like declaring you are 8 years old on the day you were born. That is why I call July 4 as Independence Day and I call January 14 as the country’s birthday. Disagree? Well I am used to being in the minority.

I love this country. But every time I visit my parents and brother’s graves in Atlanta I am struck by the absence of American flags in the neighborhoods through which I travel. I have also noticed when I visit my daughter in northern Virginia that I do not see American flags there even though most of the residents are dependent upon the government for their livelihood. In my neighborhood in Knoxville there are American flags galore. I have one at the entrance to my driveway and another at my boat dock. Why is that? Is it because those neighborhoods are mostly democrat and today democrat translates to being less patriotic? Pardon me if I think that is total lunacy. People of all stripes should be patriotic and love this country. Where else is there the richness of expression coupled with the abundant wealth of its citizens? Precious few countries would tolerate – or even guarantee – the protests of the left. I am reminded of the migrant who was enroute to the southern border. Asked why he was taking the long arduous journey, he replied that he wanted to live in a country that had fat poor people.

Granted, there have been times when I have disagreed with those entrusted to lead the country. There have been times in which I knew that the federal government’s actions and those of the state either by individuals or collectively were wrong. I have worked in my own small way to voice my displeasure and try to change it. But never have I stopped loving this country. Those on the extremes, especially those on the left denigrate the country and seek to fundamentally change it. They want the constitution either re-written or abolished. They want to get rid of the Electoral College. They call their opponents names, boycott their products, conduct violent (yet mostly peaceful) demonstrations, shout down opposing speakers, teach divisiveness in our public schools and universities and want to affect change that will ironically hinder their freedoms of speech and expression. Are they too dumb to see that? Apparently so or else Bernie Sanders, AOC, and their like would not have a prominent voice in today’s political world. Yet I welcome that diversity and do not want it muzzled although many would like to muzzle those like me.

This is a country with Ophrah Winfrey, Samuel L. Jackson and countless blacks making millions of dollars in entertainment, sport and in commerce and yet very few have said “thank you America.” Instead, folk like Reps. Al Greene, Jasmine Crockett and Maxine Waters, people like Al Sharpton. Jesse Jackson and Ibram X. Kendi are whining about how oppressed they are and say that they want to change the system that creates their wealth. Give me a break. Many have had their success because of the grievance lobby gravy train while others like Labron James draw attention away from their million (and often billion) dollar incomes by adopting the rhetoric of the left. Poor babies. 

I have always been amused by blacks with degrees from Harvard telling other blacks that they are victims and are being oppressed by the system. Look at all the grifters who exploit white guilt to line their own pockets with little that redounds to poorer blacks. Then there is the poverty establishment that exists only if they keep black people in need. And don’t get me started about the education-industrial complex which rather teach kids grievances rather than how to read.

My Dad often said that he would never live to see black children and white children going to school together. He said that the whites would not stand for it and would start shooting blacks to stop integration. Yes Georgia could be a violent hateful place. Yet Dad and Mom were in the first wave of black teachers in Atlanta assigned to previously all-white schools. Also little did Dad realize that his youngest son would help integrate the University of Georgia.

I have often said that the uniqueness of America is that here the descendants of slaves can be the teachers of the descendants of those who owned their ancestors. This is particularly true is a place like Gray, GA where many of my cousins are school teachers and are teaching the descendants of the plantation owners. We have all come a long way from where I once would get arrested for sitting in the front of the bus and might fear for my life if I did. Those who say we have not made progress are fools and should be ignored. Those who reject America for not always living up to the words of the founding fathers would, I guess, reject Christians for not living up to the words of the Bible. But how pure are they to their ideals – however warped?

I am glad I am here. I am glad for my heritage. I am fortunate to share in the wonders of this beautiful country. I love you America. Happy Independence Day.

Women’s soccer and Hegseth’s Re-namings 

Women’s soccer humiliated – again

Remember when the US women’s national soccer team lost 5-2 to a team of 15 year old boys? Well it happened again when the Swiss women’s team lost 7-1 to a boys team of 14 year olds and under. The Swiss women were using the match as a tune up to hosting this year’s UEFA’s Euro women’s tournament. When the US women they were rated the best in the world. Yet they lost their match to a group of boys barely reaching puberty. One of the women acknowledged the physical gap, saying that the boys were “bigger, stronger and faster.” Apparently, Swiss boys are also bigger, stronger and faster than adult Swiss women – and perhaps more talented too. If this isn’t evidence why boys should not be competing against girls (and men against women) in most sports I don’t know what is. Yet those on the left who throw female athletes under the bus in letting trans compete against them have obviously no regard for women (or girls). Notice to trans advocates: make women’s soccer teams quit playing boys’ clubs. But the Swiss think that it is helpful to continue to practice against the boys’ clubs. Their coaches say that using such matchups is a way to stress-test their team’s formations and endurance saying, “The training sessions are exhausting. But we all want to be in our best shape for this European Championship. That’s why I think it’s a good thing,” about the loss. One wonders why don’t they just get the boys’ club to identify as women and let them be the Swiss National women’s team. Wouldn’t they have a better chance at winning the championship?

NPR, that defender of women, interviewed a doctor Eric Vilain (what a last name) with the headline that “Arguments that trans athletes have an unfair advantage lack evidence to support.” I beg to differ, good doctor. I believe that 5-2 and 7-1 are considered as riots in soccer. Lack of evidence? Hardly.

Then there is the University of Pennsylvania, ironically President Trump’s alma mater – announcing that it is expunging Lia Thomas from its records. Penn is restoring the records that Thomas broke to their original holders and is sending personal apologies to any swimmers who lost to Thomas. Additionally, Penn will not allow males to compete in female athletic programs moving forward. Riley Gaines triumphs! You may recall that at the time Penn defended letting Thomas compete against the women and reveled in finally winning championships. I suggested that they simply replace all the women on the women’s teams with men. Penn’s president said “We acknowledge that some student-athletes were disadvantaged by these rules.” Really? You mean that a man who is 6’1” and weighs 160 pounds has an advantage over women swimmers? Who knew? Obviously, Penn valued winning championships more than they valued their women athletes.

The USNS Oscar V. Peterson

Pete Hegseth announced the renaming of the navy’s USNS Harvey Milk to the USNS Oscar V. Peterson. Milk was the navy vet who was a gay rights activist and was the first openly gay person elected to public office in California. He was assassinated by a fellow San Francisco supervisor in 1978. Obama’s Navy secretary Ray Mabus named the boat after Milk in 2016. Hegseth announced that he was changing the name to the Oscar V. Peterson. At first I thought he was referring to the brilliant virtuoso Canadian jazz pianist but no this Oscar Peterson was a navy medal of honor recipient killed during the Battle of the Coral Sea in 1942. (Historical note: The battle of the Coral Sea was the first naval battle where there was no exchange of shots between vessels. Rather it was fought by the planes from aircraft carriers. Coral Sea and the Battle of Midway both are must reads for those who love military history. BTW, my uncle-in-law served on a destroyer as a mechanic in the Pacific theatre. Can you imagine being below decks while a battle is raging over your heads?) But don’t you think that it would have been more appropriate to name a warship after Peterson than an oiler?

Hegseth said “We’re not renaming the ship to anything political. This is not about political activists, unlike the previous administration.” Well then what about the re-renaming of the military bases previously named for confederate generals? Isn’t the restoring of Forts Bragg, A.P. Hill, Pickett, Polk, Hood, Rucker and Lee a political action on the part of the Trump administration? BTW, aside from Lee and possibly A.P. Hill I think most historians would consider Bragg, Pickett, Hood and Rucker to be at best mediocre generals. Why not Longstreet, Stuart, Cleburne or Jackson? I think that whoever did the naming had a sense of humor and was actually insulting the confederacy.

Lastly, today (July 3) is my 80^th birthday. Every day is a great day. I tell people truthfully that I cannot recall ever having a bad day. A challenging day, yes. But bad, no. I really enjoy being me and always have. Even though I do not believe in reincarnation (in the Sikhism sense), if it does exist, I want to come back as me.

 The Supremes and Unanimity

In my class I talked about a letter writing campaign to influence a Supreme Court decision and said that Diana Ross was confused why she was getting all these letters addressed to the Supremes. It bombed. Not a single student had heard of Diana Ross and the Supremes.

The folks clamoring for the Fed’s Open Market Committee to show diversity of thought by not being unanimous in its voting must be reveling in the diversity at the Supreme Court. Although there have been a bunch of 9-0 decisions this term it seems that there have been a lot of 6-3 and 7-2 decisions as well. Clearly some of the decisions appear to rest more on political rather than judicial temperament. How else to explain the 6-3 vote on banning gender mutilation surgery of minors or the 6-3 vote for allowing parents to opt out of LGBTQ indoctrination of children in public schools? Shouldn’t those have been 9-0?

The court also ruled that “universal injunctions likely exceed the equitable authority that Congress has given to the Federal courts.” Of course that vote was also 6-3. Sotomayor is beside herself contending that “no right is safe in the new legal regime” the court created in limiting the power of federal judges to use nationwide injunctions to block “plainly unlawful policies.” But does she seriously think that that is true? She also said that her conservative colleagues had threatened “the very essence of public education” by allowing parents to opt their children out of classroom instruction that they claim violates their religious beliefs. She said “next to go could be teaching on evolution, the work of female scientist Marie Curie, or the history of vaccines.” To be kind, if Sotomayor really thinks this, then she should not be on the court. She has said “There are days that I’ve come to my office after an announcement of a case and closed my door and cried. There have been those days and there are likely to be more.” Maybe conservatives should send her boxes of Kleenex. 

Justice Jackson has also been unhappy and has accused her colleagues of favoring the wealthy over the poor – an astounding comment from a justice of the Supreme Court. She said regarding one decision on the California electric vehicle mandate, “This case gives fodder to the unfortunate perception that moneyed interests enjoy an easier road to relief in this Court than ordinary citizens.” The vote was 7-2 so does this means she is including her liberal colleague Kagan in this admonishment? The court also ruled, 6-3, that South Carolina can legally block Planned Parenthood facilities from receiving Medicaid funding. Here Jackson wrote the dissent, joined by Sotomayor and Kagan. The court also ruled in favor of the vaping industry in a case involving the FDA. The vote was 7-2. Guess who were the 2?

Justice Scalia occasionally chided Sotomayor for her lack of scholarship. Now in a rare public rebuke, Justice Barrett has said of Justice Jackson with regard to the universal injunction decision “We will not dwell on Justice Jackson’s argument, which is at odds with more than two centuries’ worth of precedent, not to mention the Constitution itself. We observe only this: Justice Jackson decries an imperial Executive while embracing an imperial Judiciary.” Here is what Jackson wrote in her concurring dissent “It is not difficult to predict how this all ends. Eventually, executive power will become completely uncontainable, and our beloved constitutional Republic will be no more.” Remember the comity that Scalia had with Bader Ginsburg? I guess Barett and Jackson are not going to go to lunch together.

Generally the Trump administration has won some and lost some, winning more than it has lost. Naturally when one of the less liberal justices, notably Roberts or Coney Barrett votes against Trump, the right gets in full roar calling them all sorts of names. My advice is “shut up.” Show me where their decisions have been contrary to their judicial philosophy. Even Thomas and Alito have not always voted in tandem. Is the pious right going to call them “wobbly” too? Consider the ruling that let the funding of the Consumer Financial Protection Bureau stand. Conservatives hate the CFPB whose funding is free from congressional oversight being completely funded by the Fed. The court voted 7-2 with Justice Thomas of all people not only voting with the liberals but writing the majority opinion. Justices Alito and Gorsuch dissented saying that the CFPB’s funding scheme “blatantly attempts to circumvent the Constitution.” Also Gorsuch and Alito were the only dissents in another case as well. I bet that 99.9 percent of the MAGAs disagreed with Thomas but nary a peep about his not being steadfastly pure in their eyes.

Despite all the split votes, the court issued four unanimous decisions in one day. Actually unanimous decisions were not all that rare with 42 percent decided that way. But those decisions do not make news. Consider that the court ruled unanimously that American victims of terrorism in Israel could seek legal redress against the Palestinian Authority and the Palestine Liberation Organization in U.S. courts. 

The Wall Street Journal did the tabulations and find that Justice Kagan was in the majority 71 percent of the time. Sotomayor despite all her moaning was in the majority 62 percent, tied ironically with Justices Thomas and Alito. Chief Justice Roberts was the most in the majority followed by Justice Kavanaugh and Barrett. Surprisingly only 9 percent of the cases were decided 6-3 with the three liberals dissenting. There were 6 percent decided with Thomas, Alito and Gorsuch dissenting. Unless you think that all decisions should be unanimous or that all should be 5-4, it’s hard not to like this court. With the notable exceptions of Sotomayor and occasionally Jackson, the justices appear to be consistent in the application of their understanding and interpretation of the constitution rather than espousing their personal political views.

Actually I think the most important judicial action is not on the court’s docket. Many have been yelling “constitutional crisis” due to Trump’s actions even though Trump, unlike Biden, has yet to defy a Supreme Court ruling. But what happens when a lower court defies a Supreme Court decision? Precisely that happened when the Court issued a stay on an April 18 injunction in the case D.V.D. vs Department of Homeland Security. The lower court judge then issued an order after the Supreme Court stay acting as though the court had not thrown out his initial injunction. The Department of Homeland Security immediately said “The district court’s ruling of last night is a lawless act of defiance that, once again, disrupts sensitive diplomatic relations and slams the brakes on the executive’s lawful efforts to effectuate third-country removals.” DHS condemned the lower court’s “unprecedented defiance” of the Supreme Court’s authority. What happens next if the lower court chooses to continue to ignore the Supreme Court’s authority? Could the Supreme Court enjoin the lower court? Would the lower court judge be arrested and removed from the bench? Would the only recourse be impeachment by the congress? Then would the democrats support the impeachment? This would be a real, not and imagined constitutional crisis. This could get interesting.

Note: A lawyer friend of mine texted me”I’d like to tell those 3 to “Get outa my life, why don’cha Babe? But they all keep hanging on.” I texted back that the last line was also true “Ain’t nothing I can do about it.”

Is it now okay to assassinate scientists (and generals)?

Apparently I may be the only one who finds Israel’s assassination of Iran’s nuclear scientists and generals disturbing. When has another country wantonly targeted another country’s scientists and military heads before – even during wartime? Did we try to kill Rommel, Guderian, Kesselring or von Manstein during WWII? Did the Germans have a program to kill Patton, Eisenhower, Bradley or Montgomery? What about the scientists? Not only did we not kill them, we imported 350 of them including Wernher von Braun to build our rocket program. So is Israel’s killing of the Iranians unprecedented in history – at least on this scale?

Note: drummer f2f732403f has corrected me pointing out that we took out Yamamoto. Thank you! Its my bad especially since I have read Dan Hampton’s riveting “Operation Vengeance” an absolutely marvellous account of the brilliance of that successful undertaking in the Pacific theater. Highly recommended.

I have heard nor seen nary a peep of condemnation. The Arab countries have made sympathetic clucking noises but you can tell their hearts are not in it. It is though they feel compelled to admonish the Israelis when in fact they are probably relieved that the Iranian regime poses less of a threat to the whole region. Saudi Arabia said the attack was a “violation of Iran’s sovereignty” and that “The Kingdom underscores the need to exert all possible efforts to exercise restraint, de-escalate tensions, and avoid further escalation.” Do tell! Qatar, the site of the US air base that was targeted (but missed) by Iranian missiles said “The current dangerous tension in the region could lead to catastrophic consequences at both the regional and international levels” and that it “Regrets the deterioration of the situation with the strikes on Iranian nuclear facilities.” The UAR which really doesn’t like Iran said “The Ministry of Foreign Affairs stressed the importance of prioritizing diplomacy and dialogue to resolve disputes, through comprehensive approaches that promote stability, prosperity, and justice.” Egypt, which is the largest recipient of US aid in the Arab world mumbled “Egypt affirms its rejection of any violation of the United Nations’ Charter and international law and emphasizes the necessity of respecting state sovereignty.” Iraq, Lebanon and Oman said much the same. Again, a milquetoast pseudo-condemnation of the bombing but no mention of the targeting of the scientists.

Not only is this outrage missing from the Arab world but it is strangely missing from the leftist press. Yes there is universal condemning of the bombing by Israeli aircraft but no mention of killing of the scientists (or generals) – nine of who were killed while sleeping in their beds. I did see one rather mild statement that “targeting scientists may trigger blowback given concerns regarding legality and morality.” Wow! 

One wonders if the Iranians will now seek to assassinated Israeli civilian and military leaders. And what about the terrorists who have come in the country at the southern border? The Wall Street Journal has reported that Tehran has long supported terror operations in South America and has a pipeline of sending its spies and proxies into the continent. Iran has sent it’s operatives to Venezuela where they are given passports meaning that they can travel freely within the region. The Journal says that some 10,000 a year got Venezuelan passports. So what are all those Iranians doing? Are they just going to sit on their hands? Or are they going to try to affect some revenge on the US and Americans? I know that Trump and Hegseth have serious security but I would think that our famous scientists and prominent generals should also watch their backs.

Trump vs Powell – and Bessent?

What do you think about Federal Reserve independence? Have you noticed that for all Trump’s gnashing of teeth, name calling, threatening and cajoling that congress has been mostly silent? Powell has his regularly scheduled hearing on monetary policy on Tuesday. Trump is applying pressure on the republicans on the committee to pressure Powell to lower rates. Trump is now emphasizing the need for lower rates to reduce the cost of financing the ever increasing Federal debt. Such is easier it seems than reducing the government’s voracious appetite for spending. Trump wants the Fed funds rate to be around one percent down from the 4.3 percent where it is today. Trump is now calling Powell “dumb” and a “Trump hater.” But Powell is certainly not dumb and its hard not be a Trump hater with all the vitriol coming from the president. However, at least one of these two will continue to show class. Speaking of class, how about this from our president directed to the other governors at the Fed “I don’t know why the Board doesn’t override this Total and Complete Moron!” Does this mean that he is now applying pressure to his other two appointees, Chris Waller and Michelle Bowman? We will see.

Of course, presidents have always applied pressure on the Fed, just not so publicly. The press often cites Richard Nixon pressuring Fed chair Arthur Burns to lower rates prior to Nixon’s reelection. Others point to Lyndon Johnson calling William McChesney Martin to his Texas ranch for “consultations.” But never to my knowledge has the spat been so out in the open and so loudly profane. But hey, that’s this president. 

What will be interesting to see is how the congress-folk react to Powell and his testimony. Will he be grilled by both the republicans and the democrats? Will they support Trump in calling for a lower fed funds rate? Again once all the cajoling had the pretense of sparking economic growth to offset the projected impact of Trump’s tariffs on the economy. Trump keeps arguing that there is little inflation so prime the pump, Fed. However, inflation is still above the Fed’s target rate of 2 percent. Again many of us think that two percent is too high a target. An inflation rate of 2 percent means that prices will double in 36 years (rule of 72). That means that nominal income would have to double in order for real income to stay the same.

Mind you, the Fed is a creature of the congress. The congress can enact new legislation regarding the Fed, its composition and its goals. Why hasn’t Trump called for new legislation? Congress would probably reject such a plea because Trump is a short timer. Do we really want a republican congress to give the president control over Fed decisions in order to give that power to the next democrat president? Or should I say the next socialist (democrat) president? Can you imagine Joe Biden dictating monetary policy? That sobering thought should be enough to let Trump keep flailing away while Powell and the Open Market Committee continue to do what they do. However, whatever move the Committee makes – and I am betting it will lower the rate in July – will be met with commentators saying that Powell finally gave in, if for no other reason to shut Trump up.

But let us suppose that the fed funds rate goes down. Will this mean, as Trump keeps telling us, that we can save billions (or as Trump tweets BILLIONS!)? Not necessarily. It depends on what happens to Treasury rates. There are three categories of Treasury issues. Lowering Fed funds typically lowers Treasury bill rates. T-bills mature in less than one year and make up only 21 percent of Treasury debt. So if Federal borrowing is $30 trillion, about $6.3 trillion will be in bills. Treasury notes mature in 1-10 years. They comprise 52 percent of the debt issuance or $15.6 trillion. Treasury bonds mature in greater than 10 years and are mostly 20 year or 30 year bonds. They make up 17 percent or $5.1 trillion, The other 10 percent are Treasury Inflation Protected securities (TIPS) of 8 percent ($2.4 trillion) and Floating Rate Notes of 2 percent ($1.5 trillion). So what happens to the interest on the debt depends on what happens to the Treasury yield curve. As I write this 3 month Treasurys are 4.29%, the two year is 3.73%, the ten year is 4.29% and the 30 year is 4.85%.

Lowering short term rates may be accompanied by rising longer term rates if the markets anticipate rising inflation leaving the cost of financing uncertain. Of course the Treasury could try to move more financing to the short end of maturities thinking that usually short rates are lower than longer term rates. So why isn’t Trump yelling at Scott Bessent to start issuing more T-notes and bonds have the Fed start buying the longer term Treasury issues to drive up their prices and down their yields. So Bessent should issue more Treasury notes and bonds and less Treasury bills. Right? What would be interesting is the market reaction to such a strategy.

Bernanke’s Fed did do something similar back in 2011, called Operation Twist (trying to twist the shape of the yield curve). His Fed keep short rates near zero while buying longer term Treasurys. All this expanded the money supply and eventually led to inflation. So does Trump want the Powell Fed to mimic the actions of the Bernanke Fed that the same critics label as a failure? It is interesting that Bernanke complained about the “fiscal cliff” that the congress was rushing toward and was trying to use Operation Twist (nee qualitative easing) to help ease the country to a soft landing. There is the famous saying that “Those who cannot remember the past are condemned to repeat it.” In this case it is repeating the same thing and expecting a different outcome.

HUD moving? In-state tuition for illegals? New York’s new nuke?

Thoughts from Warrior’s Path State Park

I have long said that the DC based agencies should relocate to move closer to the people that they serve. Well moving across the river to northern Virginia was not exactly what I had in mind. A recent headline reads “HUD becomes first major cabinet agency to exit DC, citing ‘failing’ HQ — which DOGE wants to sell.”

Well and good but moving to Northern Virginia? None of the employees will have to relocate. HUD is currently located in L’Enfant Plaza in southwest DC. L’Enfant Plaza was the home of the Office of the Comptroller of the Currency when I worked there in the early 1970s. The Comptroller relocated to another site within DC. Moving across the river mirrors what the National Credit Union Administration -another one of my agencies – did. It went from close to the White House to across the river to Northern Virginia. I think getting out of DC brings a different perspective to those in the agencies but it is more helpful to leave the area entirely. Living next to people with real jobs rather than next to those who exist only to sponge off the government affects ones view on life. Instead of having your neighbor asking if a certain regulation is likely to include subsidies to big banks, your neighbor is more likely interested in how your children’s soccer team is faring. All of a sudden you are no longer the center of the universe. If HUD really wants to be closer to the people it needs to relocate to Detroit.

The Justice Department is suing the state of Minnesota for giving in-state tuition and financial aid to illegals. The lawsuit says that Minnesota is violating a federal statute that prohibits higher education institutions from offering benefits to illegal immigrants that aren’t available to U.S. citizens. DOJ has also sued Texas and Kentucky who have similar laws. Texas stopped enforcing its law. Texas? Now that’s a shocker. What about state’s rights? Seems to me if a state wants to do this, why not (unless they are using federal funds)? Texas was doing this? Seems to me that this is a local issue that should be decided at the state level and that the federal government should butt out.

New York is going to build a new nuclear power plant. New York? Let me see, Texas was giving in-state tuition to illegals and now New York is building a nuclear powerplant. What in the wide world of sports is going on? Are socialists now in favor of nukes? The new 1-gigawatt facility will be enough to power 1 million homes. I wonder how many acres of solar panels and how many hundreds of mega windmills would be required to do the same? Of course the governor is couching the new nuke in terms of meeting the state’s green energy climate goals. Isn’t this a tacit admission that solar and wind suck – to use a technical term? When then governor Cuomo – the disgraced one who could not even beat a rabid socialist for mayor of New York – shut down the Indian Point nuclear plant in 2021, the result was an increased use of fossil fuels to replace the lost capacity. Greenhouse emissions rose! Naturally, the greenie weenies are throwing a temper tantrum. One of them says “Governor Hochul’s nuclear gamble is a reckless distraction from the clean, affordable energy New Yorkers actually need. Nuclear power is dirty, dangerous, and wildly expensive — and this project will leave New Yorkers footing the bill while delaying urgently needed progress on renewables. Hochul needs to stop chasing false solutions and start delivering real climate action.” Wow! “Dirty, dangerous and wildly expensive”? Do tell. Obviously, this guy is living in the past and knows nothing about the new generation of smaller cleaner more efficient nuclear reactors. But then again, the nuclear industry is not paying this guy’s bills. By the way, did you know that Microsoft is bringing the notorious Three Mile Island back on line to power its AI and cloud services? Also the new nuke in New York will employ 1,600 to build and 1,200 to operate. The plant is slated for upstate New York. It’s a shame because I would like to see the incoming socialist mayor of New York City try to ban the transmission of electricity from nuclear power plants into the city (just speculating).

Warriors’ Path State Park is in Kingsport and is a great place to camp, fish, boat, picnic, hike and just get away – but not too far away. Highly recommended.

Random thoughts #61

Remember when some universities and businesses offered counselling, safe rooms and Legos to those poor souls traumatized by Trump’s election? Are the rooms still there for Jewish students to use?

The right is chuckling over Jasmine Crockett’s ending her bid to be the head democrat on the House Oversight Committee saying that even her own party doesn’t want her as a leader. Crockett said “It was clear by the numbers that my style of leadership is not exactly what they were looking for, and so I didn’t think that it was fair for me to then push forward and try to rebuke that.” Her “leadership style” was called a “clown” by Fox’s Greg Gutfield. Actually “clown” may be a term befitting more members of congress than Crockett. Consider that James Comer is the ranking republican and that Majorie Taylor Greene also sits on the committee. High entertainment has been provided by the interchange in the committee. Remember when Crockett called Greene “bleach blonde, bad-built butch body”?

Speaking of clown, Texas’ Al Green who seems to introduce an article of impeachment weekly just introduced another one. Did anyone say “clown”? AOC joined the impeach Trump crowd. Trump called her “stupid” calling her “one of the ‘dumbest’ people in Congress.” Wow. You would think he would have tried to insult her. I wonder what he thinks about Arizona’s Paul Gosar or Florida’s Maxwell Frost? Or how about New Mexico’s Melanie Stansbury who is not the brightest bulb displaying the results of a poll whose numbers totaled 110 percent?

And of course we have been witnessing the clown show called the annual debate over which penny on dead men’s eyes are we going to move to the other eye. Seriously, congress is debating Trump’s “Big, Beautiful Bill” which only shifts goodies from one group to another while smothering all of us in more debt. The only red in Washington is the national debt.

I just saw an ad saying Trump’s BBB will cut taxes by 15 percent. Of course that is a lie. The BBB only makes permanent the Trump tax cuts from the first term. It is maintaining the status quo and does not cut income taxes.

JD Vance again showed how classless he is by calling Sen Alex Padilla “Jose”.

Iran fired missiles at a US base in Qatar. There were no casualties – mainly because the ones that were not shot down missed their target. Seems that the most dangerous place to be is somewhere not targeted by Irani missiles.

Where’s Hezbollah? Why aren’t the Houthis shutting down the Red Sea in support of Iran? Didn’t they say that they would start attacking shipping if Trump bombed Iran?

One of the pilots of the B-2s that bombed Iran was a woman. Maybe DEI will now become diversity, equality and inclusion rather than diversity, equity and inclusion.

ICE arrested 16 Iranians, three with terrorist ties. Will the left stage protests to free them too? It is estimated that over 1,500 Iranis came across the border illegally during the Biden years.

Trump wants US oil to drill, baby drill. Maybe that’s why he started bombing Iran. If the Iranis retaliate by trying to shut down the Strait of Hormuz, then oil prices will skyrocket enticing oil companies to start drilling more oil. As it now stands the price per barrel is not enough to spur drilling. Darn profit seekers! Why doesn’t Trump simply issue an executive order mandating drilling?

For all those folk who think that term limits lead to better government be reminded that the California legislature is term limited.

The Supreme Court decided that Trump could deport illegals to a country not their own. It is sending a group to South Sudan. Of course the vote was 6-3 with Sotomayor doing her usual bemoaning. She was joined by Kagan and Jackson. Actually the threat of being deported to South Sudan may cause an explosion in self deporting. Would you rather go back to Nicaragua and Daniel Ortega or be shipped off to South Sudan?

A socialist won the democrat primary for mayor of New York. Most people thought Cuomo was a shoe-in but Zohran Mamdani a state assemblyman mounted a credible challenge. He is a socialist so naturally AOC and Bernie Sanders endorsed him. Mamdani wants to put in a city owned grocery store in every borough, free public transportation, he is antisemitic accusing Israel of genocide and using the slogan “globalize the intifada”, free healthcare, freeze rents in already rent-stabilized housing, raise taxes on the rich among other things. Radical yes but he virtually everything he is for you can find some “mainstream” democrat that agrees with him. Consider his statement on Trump’s bombing of Iran. “While Donald Trump bears immediate responsibility for this illegal escalation, these actions are the result of a political establishment that would rather spend trillions of dollars on weapons than lift millions out of poverty, launch endless wars while silencing calls for peace, and fearmonger about outsiders while billionaires hollow out our democracy from within.” Find me one democrat in Washington who disagrees with that statement.

I hope he gets elected. Seems like the best way to educate voters on socialism is to elect one. Chicago anyone?

Speaking of elected, would you believe that there is all this talk now about a political comeback for Kamala Harris? Seems she is contemplating emulating Richard Nixon and running for governor of California. Didn’t Nixon lose that race too?

Federal Reserve Groupthink?

When I was in graduate school in the 1960s the sainted Milton Friedman once said that a poll was conducted asking “What is the Federal Reserve?” One-third answered an Indian reservation. One-third answered a bourbon and one-third didn’t know. Those days are gone although the Fed probably pines for its return. Today Trump has thrust the Fed into the spotlight with his almost daily bellicose badgering of Fed chairman Jerome Powell. But even Trump knows that Powell only has one vote on the Fed’s Open Market Committee where the other 6 governors, five reserve bank presidents and the president of the New York Fed sit. Trump actually mused on firing the members of the Committee in addition to Powell. What is interesting is that he has not publicly berated the two other members of the board that he appointed, Christopher Waller and Michelle Bowman.

However, some Trump apologists have criticized Waller and Bowman. Larry Kudlow has accused the Open Market Committee of “groupthink” because the recent votes in the committee have been unanimous. Kudlow asks “Where is some diversity of thought and why aren’t these board members questioning Powell’s slippery and uninformed anecdotes of his new tariff war on inflation?” Kudlow show know better. The unanimous votes are not unique to this Fed. In recent memory I can only think of two others and they were single votes by two different reserve bank presidents. In reality, Open Market Committees are often characterized by diversity of opinions rather than groupthink and even though the announced vote may be unanimous, it is only to show a unified face to the world. Can you imagine the reaction of the press and markets if the votes were 7-5 or heavens forbid 5-7? The Committee would be characterized as being in disarray with Powell having lost control. Markets would be shaken. The Fed knows this and presents a united front even though there could be dissention. Note that despite unanimous votes to keep the fed funds rate unchanged that Governor Waller has hinted that the committee might vote to lower the rate when it meets in July. Waller would not have made that statement without the blessing of Powell. So look for a 25 basis point lowering unless there is an uptick in inflation. Also look for that vote to also be unanimous.

The Fed is a different place from that which existed when Friedman made his joke. Although the board was still comprised of political appointments, most of whom know little about monetary economics, such was not the case in the Federal Reserve district banks. St. Louis was known as a bastion of monetarism. Its research department was made up PhDs, many from Chicago, who were disciples of Friedman. It produced a stream of academic papers with a monetarist bent and whose president espoused it as well. The Minneapolis Fed was one heavily influenced by the rational expectations theory of Robert Lucas. The Cleveland Fed had its own theoretical bent as did Richmond and Atlanta. My friend from the University of Georgia, Bob McTeer became president of the Dallas Fed and instituted strong regional studies. The Boston Fed took my research developed at the Comptroller of the Currency on lending discrimination and developed the strongest group of economists in that area. So many of the Fed banks had their own view of monetary theory and its impact on the economy. Not surprisingly, there were many more dissenting votes on the Open Market Committee with most of the dissentions coming from the reserve bank presidents. No groupthink then. But of course, with the Fed not being prominently in the public’s eye, there could be dissention without creating seismic turbulences in financial markets. 

However, although I discount groupthink with today’s Fed, there is less intellectual diversity among the reserve banks. Clearly Atlanta (whose president is a co-author of mine), Minneapolis and San Francisco are headed by progressives who do more social outreach than other banks. There are no intellectual outposts of monetarism or rational expectations in today’s Fed system. Only the New York Fed seems to be producing academic quality research. Outside of Washington most reserve bank research departments now concentrate on regional economic issues.

I wish that the Fed would return to where once was populated by different types of thinkers throughout the system. It is understandable that even independent thinkers can get captured by working at the Fed Board in Washington. One example was a member of my dissertation committee at Ohio State who was a student of Milton Friedman. When that member left academics and went to the Fed in Washington, he was slowly transformed from a monetarist to an interest rate targeting advocate being completely transformed into a Fed-type. At least he still loved basketball and jazz. 

The legions of economists at the Fed in Washington are the ones who predominately have the same mindset. They are the ones who build the econometric models that generate the results that the Committee uses (along with those if each reserve bank’s research department) in its deliberations. What is now missing is more diversity of economic thought among the reserve banks where the concentration on regional issues has led the reserve bank presidents less able to see monetary issues from a wider perspective. Then there should be no surprise that the Committee meetings result in (mostly) unanimous votes.