Excerpts from recent editorials in the United States and abroad:
The New York Times believes the Federal Reserve should take a measured approach to addressing inflation
Jerome Powell, the chair of the Federal Reserve, has often expressed admiration for the resolve exhibited by one of his predecessors, Paul Volcker, who was willing to crash the economy in the early 1980s to drive down inflation.
Inflation in the United States is now higher than at any time since Mr. Volcker’s recession, and Mr. Powell faces growing calls for the Fed to emulate that resolute performance and do whatever is necessary to control inflation, even if it hurts economic growth.
The present moment requires a different kind of courage. Instead of reprising Mr. Volcker’s shock-and-awe tactics, the Fed needs to pursue a more measured approach, one that would bring inflation under control without sending the economy into a deep recession. There is a risk that by forgoing stronger measures now, the Fed will ultimately have to impose greater pain. But there are also good reasons to think that the Fed can succeed — not least because of the enduring legacy of Mr. Volcker’s achievement.
The Fed already has begun to shut down the stimulus campaign that it launched in the spring of 2020 to limit the economic impact of the pandemic. The central bank raised its benchmark interest rate at its recent policymaking meeting, in March, by a quarter percentage point to a range between 0.25 points and 0.5 points. It is widely expected to accelerate this process by announcing on Wednesday an unusual half-point increase in the benchmark rate, and by announcing that it will begin to reduce the bond holdings that it amassed to further suppress borrowing costs.
It is time to raise rates. The economy has rebounded as COVID-19 has loosened its grip. Notwithstanding the quirky weakness of reported growth in the first quarter of 2022, inflation is now the primary economic problem confronting the United States. Prices are outpacing wage growth for most Americans, eroding their living standards, and higher rates will help to slow rising prices.
The Fed’s benchmark rate would need to rise to somewhere between 2% and 3% to reach a level at which it is neither stimulating nor restraining growth. Some Fed officials and outside economists have argued for additional half-point moves in the coming months. Some already are convinced the Fed will need to raise rates well above that neutral level to break inflation. Under Mr. Volcker, the rate hit 20%. Mr. Powell, to his credit, has maintained a more measured tone. He said recently it was time for the Fed to move “a little more quickly.”
One reason to go slowly is that it takes time to judge the impact of changes in Fed policy. Merely by signaling that it plans to raise rates, the Fed already has initiated a significant reaction in financial markets. Average interest rates on home mortgages, for example, have climbed sharply. The monthly mortgage payment required to buy a median-price home has increased to $1,690 from less than $1,165 a year ago, according to Roberto Perli, the head of global policy research at the investment bank Piper Sandler.
Another reason for caution: Economists continue to debate the causes of the current inflation.
Some place the blame primarily on the pandemic, which has caused sharp reductions in the availability of services and goods, driving up prices. With new vehicles in short supply, for example, used vehicle prices rose by more than 50% through January. More recently, Russia’s invasion of Ukraine has disrupted global markets for energy and wheat, driving up the prices of gasoline and food in many parts of the world.
Others, however, regard the federal government’s response to the pandemic as the key factor. On top of the Fed’s efforts to lower borrowing costs, Congress distributed trillions of dollars in aid. Despite widespread job losses, the average household had more money to spend, creating more demand for goods and services.
Here’s why the difference matters: The central bank’s decision to raise interest rates can curb demand; supply shortages, on the other hand, are best endured patiently. The Fed’s decision in the week ahead won’t ease them.
Lingering questions about the health of the economy provide another reason for the Fed to move cautiously.
A goal of the Fed’s stimulus campaign was to return the economy to full employment, meaning that those who wanted work would be able to find it. By one popular measure, the unemployment rate, which sits at the low level of 3.6%, the Fed has succeeded, prompting some to question the need for continued stimulus. But the government’s definition of unemployment is narrow. It includes only people actively seeking work, while many Americans remain on the sidelines. About 1.6 million fewer people are working now compared with early 2020.
In the 1970s, workers successfully demanded wage increases to compensate for expected increases in prices, while employers raised prices to cover the expected cost of higher wages. This dynamic, which economists call a wage-price spiral, can be dangerously self-perpetuating.
But in the intervening decades, American workers have suffered a significant loss in bargaining power. While many businesses say they are struggling to find enough workers, that has not translated into real wage gains for employees. Businesses are raising prices much faster than they are raising wages, allowing them to reap record profits. While inflation is up by 8.5% over the past year, wages for private-sector workers are up by just 5%. In other words, there is no evidence the United States is entering a wage-price spiral.
Finally, Mr. Powell can afford to move more cautiously because Mr. Volcker and his successors convinced the American public and global investors that the Fed is committed to controlling inflation.
Mr. Volcker once told an interviewer that he wore a path in his rug by pacing back and forth, wondering whether the pain he was imposing would accomplish that goal. It was a victory won at a high cost. Moving too quickly to confront inflation, or raising rates too high, would squander it.
The Wall Street Journal rebukes Rep. Jim Clyburn on student loan forgiveness
Democrats dissembled about the costs of their student loan takeover in 2010, and now they’re deceiving Americans about their drive for student debt cancellation. But South Carolina Rep. Jim Clyburn, a member of the House Democratic leadership, gave away the game over the weekend.
Progressives seem to have figured out that sweeping student loan forgiveness isn’t popular with Americans who didn’t go to college or who repaid their loans. Hence they now say that canceling $50,000 per borrower will be a boon for the working class. Sen. Elizabeth Warren says 40% of borrowers with student loan debt never completed college. If she were a company, the Federal Trade Commission could sue her for false advertising.
More than half of borrowers owe less than $20,000 in debt. The borrowers Democrats really want to help are white-collar workers with advanced degrees who account for 56% of the $1.6 trillion in federal student debt. Mr. Clyburn said as much in an interview with Bloomberg: “When you see a student coming out of college—law school or professional schools—with $130,000, $150,000 in debt, that cripples the economy in more ways than one.”
Wasn’t higher education supposed to be an investment? Well, it’s not paying off for millions of Americans, especially those with expensive graduate degrees. Many colleges require students to fund their PhDs—which can take six to seven years to complete—yet doctorate recipients in the humanities in 2019 earned $53,000 on average. Machinists make more.
Mr. Clyburn may also be trying to assist historically black college and universities with less than stellar student outcomes. Morris College in Sumter, S.C., has a 25% graduation rate. The median earnings for a borrower who enrolled a decade ago is $27,644, and debt for those who completed their degrees is $31,450. Some 97% of borrowers aren’t paying down their loans.
Progressives also claim that President Biden has legal authority to cancel debt. He doesn’t. But they want him to do it anyway and dare courts to stop him. As Mr. Clyburn explained, “So my whole thing is, use your executive authority and let the courts have at it.”
This seems to be the Administration’s guiding legal principle. Do what you want until the courts say it’s illegal. Recall its illegal eviction moratorium and vaccine and mask mandates.
Mr. Clyburn was less forthright in claiming that “students are deserving” of loan forgiveness because “the forces that be have ratcheted up interest and all sorts of fees on student loans.” Fact check: Student loan interest rates have fallen by about half since 2008 thanks to “the forces that be” on Capitol Hill.
Congress in 2013 slashed interest rates on student debt after Ms. Warren howled that the feds were making money off student loans by charging borrowers higher interest than federal borrowing costs. This was another sham. Lower interest rates merely served as another subsidy for colleges, allowing them to load borrowers with more debt.
Now the feds are losing tens of billions of dollars because many borrowers have taken on so much debt they can’t make even the smaller interest payments. So now Democrats want to bail out the underemployed borrowers they and colleges duped.
To avoid the appearance of helping the affluent, Mr. Biden is considering limiting loan forgiveness to borrowers making up to $150,000 ($300,000 for couples). Yet this would still cover 97% of all borrower debt, including most recent law and medical school grads. The student loan con goes on and on.
According to the Los Angeles Times, the mere threat of overturning Roe is a caller to action for voters
In scathing, dismissive language, Supreme Court Justice Samuel A. Alito Jr. wrote a draft opinion that does what for many decades seemed unimaginable — it overturns the 1973 ruling in Roe vs. Wade and annihilates the constitutionally protected right of a woman to control her own body. If the leaked draft, which was written in February and confirmed as authentic by Chief Justice John G. Roberts, Jr., becomes the court’s final decision, it will set reproductive freedom back generations. About half the states either have or will pass bans or will severely restrict abortion, with the burden falling on women who can’t afford to travel to an out-of-state abortion clinic.
Striking down Roe will undo a nearly 50-year precedent. Generally, the court overturns a decision in order to restore or grant rights. This would be the rare Supreme Court ruling that revokes a person’s fundamental rights.
Sadly, this was not a surprise. It seemed clear from the oral arguments in December in Dobbs vs. Jackson Women’s Health Organization — the case involving Mississippi’s ban on abortions after 15 weeks of pregnancy — that the court’s conservative justices were looking for ways to uphold that ban and scale back abortion rights.
Alito in the draft opinion wrote that “Roe was egregiously wrong from the start” as well as weak and not settled. His opinion would wipe out a constitutionally guaranteed right to abortion altogether, arguing that because abortion is not explicitly mentioned in the Constitution, it must at least be a right that is grounded in the nation’s history and concepts of liberty before it can be worthy of constitutional protection. But, he writes, abortion was mostly criminalized throughout American history. It’s absurd that abortion rights can’t be protected today because male lawmakers criminalized it in the past.
“He freezes our constitutional rights today at what that small group of people thought the world was back then,” says Jennifer Dalven, director of the ACLU’s Reproductive Freedom Project. “That should be frightening for all of us.”
Nor should anyone trust that the court will just stop at abortion rights. The idea that a right must be grounded in history before it is constitutionally protected could jeopardize “a whole host of rights — from the right to use contraception to the right to have a relationship with the person of a same sex,” Dalven says.
Voters need to fix this. Overturning Roe would put abortion laws in the hands of state and federal lawmakers. State lawmakers, who were happily passing restrictions that flouted Roe, will surely try to mow down whatever remaining abortion protections exist in their states after Roe is gone unless voters stop them.
California has protected reproductive rights under state law. In fact, Senate President Pro Tem Toni Atkins (D-San Diego) and Assembly Speaker Anthony Rendon (D-Lakewood) said Tuesday they are committed to getting a constitutional amendment on the November ballot that specifically protects the right to abortion here.
That’s great. But it’s not enough.
The Women’s Health Protection Act, a congressional bill that would ensure the right to a legal abortion nationwide, passed the House but not the Senate. Polls show a majority of Americans support a woman’s right to an abortion. Those representatives need to know that people who believe in abortion rights want that bill passed and will vote them out of office if they don’t protect abortion rights. On the flip side of that, emboldened conservative politicians may try to pass a national ban on abortion in a couple of years. Let legislators know it’s a deal breaker if they do that.
The decision to become a parent is fundamentally a question of personal freedom. But it’s also an economic decision. And it’s appalling that a nation that does so little to support children and families is on the cusp of taking away the right for people to decide if they have the means to raise a family.
Alito got one thing right in his draft when he wrote that “women are not without electoral or political power” when it comes to abortion laws, though that’s not a good reason for getting rid of a constitutionally protected right. It’s time for them to use it to stand up to the elected officials who support curtailing their constitutional rights. It’s time for everyone who cares about individual rights to see this draft ruling as a call to action.
The Washington Post believes Congress must act now to prevent election fraud in 2024
A group of senators met last week to try to prevent anyone from stealing the 2024 presidential election or from once again inciting an armed mob to attack the Capitol. The bipartisan band, led by Sens. Susan Collins (R-Maine) and Joe Manchin III (D-W.Va.), aims to update the 1887 Electoral Count Act, the archaic law that governs how Congress counts electoral votes that became a focus of Donald Trump’s efforts to overturn his 2020 election loss. The fate of the nation’s democracy might rest on whether these senators strike a deal, and soon: If Republicans take the House after November’s elections, a radicalized House GOP caucus will likely refuse to do anything that could be construed as hostile to Mr. Trump.
Some of the Democrats in the bipartisan group want to add voting-related measures to the bill they are negotiating. This is understandable; Congress has done nothing as Republican state legislatures have erected innumerable new barriers to voting. But the group should not get sidetracked. Electoral Count Act reform can attract 60 Senate votes; voting rights measures cannot.
Simply updating the act would be an important victory for democracy. Following the 2020 vote, Mr. Trump’s lawyers cooked up cockamamie interpretations of the act that would have, among other things, permitted Vice President Mike Pence to throw out electoral votes at will. Thankfully, Mr. Pence resisted Mr. Trump’s pressure campaign to act on these fatuous arguments. But a future vice president might not be so principled.
An alarming number of GOP lawmakers also used the act’s vague language — reading into the act broad congressional authority to intervene when electoral appointments are not “lawfully certified” or when electoral votes are not “regularly given” — to object to counting electoral votes from a series of swing states that Joe Biden carried. This language was not supposed to empower partisan congressional majorities to reject presidential electors at will, but that was essentially the interpretation most House Republicans embraced.
The bipartisan negotiators must clarify the process so it leaves no room for a de facto coup. It should be clear that the vice president serves nothing but a pro forma role tallying electoral votes. Members of Congress should be allowed to object to presidential electors only under extremely narrow circumstances — say, if state officials send in a slate in defiance of a court order. The threshold for triggering a debate on whether to accept a state’s electors should be far higher. The bipartisan group appears to agree on these basics.
It should also take more than a bare majority to sustain such an objection, so it would be extremely difficult for one party to unilaterally overturn a presidential election. So far, the bipartisan group has not agreed on that reform. Lawmakers should clarify the role of the courts, empowering the judicial branch to sort out election disputes before Congress counts electoral votes. And they should make it crystal clear what happens when the House and the Senate disagree on a state’s electoral slate, so there is no question about which candidate gets a state’s votes.
The country cannot limp into another presidential election with electoral rules open to partisan misinterpretation and abuse. Congress should have no higher priority than fixing the Electoral Count Act, immediately.
China Daily says that NATO isn’t a defensive pact but an aggressive bloc dedicated to expanding hegemony and Western values
An international gathering of youth is usually taken as an opportunity to promote exchanges and mutual understanding. But this was not the case at the NATO Youth Summit held late last month.
Instead, NATO Secretary-General Jens Stoltenberg sought to foment prejudice and hatred, claiming that China represents a major security challenge that NATO youth should be alert to.
He urged the organization to have the so-called China’s threats “reflected” in its new Strategic Concept, cautioning that China’s rise will have “consequences” for the pact’s security as “China doesn’t share our values”.
A non sequitur for sure.
In fact, the logic is utterly absurd. According to that premise if NATO thinks a country does not share its “values” then it must be a threat.
And that is before any consideration of what NATO’s values might be, given its illegal bombing of Yugoslavia in 1999 and its interventions in Afghanistan, Iraq, Libya and Syria over the past 20 years.
Since those actions seem characteristic of the transatlantic security alliance, then it is not just China that doesn’t share NATO’s “values.”
That many of its members are among the richest countries in the world does not necessarily endow the organization or its members with the privilege to ignore the norms governing international relations.
However, the conflict in Ukraine has revealed that NATO is by no means a defensive pact, but an aggressive bloc seeking to expand the West’s hegemonic interests under the pretext of defending “values” and “rules.”
This expansionism on ideological lines was highlighted by Stoltenberg saying that NATO will “make the process of joining as quick as is feasible” for Finland and Sweden, whose parliaments are deciding by the middle of this month whether to join the pact.
That the last two nonaligned Nordic countries are on the verge of being incorporated into the bloc, which did not happen at the height of the Cold War, and which will necessarily serve to increase the frictions between NATO and Russia, shows Stoltenberg’s warnings should not be taken at face value.
It is the expansionist and divisive mindset of the bloc that deserves the vigilance of NATO youth, as their future will not be decided by the “threats” Stoltenberg peddles but the threats stemming from the “values” he urged them to uphold.
Even though the organization has the obligation to help cultivate a lasting and balanced security mechanism in Europe, it just pretends to pursue that objective while all the while fueling an arms race and engaging in brinkmanship.
The youth of NATO should reject the value judgment that Stoltenberg and the bloc are trying to sell them; it is outdated and dangerously unsound.
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