Tag: Federal Reserve

Random Thoughts 0f Mid-January 2022

Covid-19 Pandemic Continues with Omicron

Mid-January 2022 may be ushering Omicron into my hometown as I type. Numbers had been consistent and in the single digits per day for the past few weeks. But numbers jumped, really jumped this last week with almost one hundred total cases just reported. This will most likely continue for a month if we follow the pattern seen in the cities.

Hopefully our little hospital won’t become overwhelmed. Not many medical choppers lately to rouse me from a sleep. I pray that continues. But the vaccine rate is low and Omicron evades the vaccine. This novel coronavirus remains a puzzle, one that most are too tired to solve.

Masks are scarce here. School is in person. Businesses are open so staffing may be a tad bit difficult but doable. My corner of the world leans toward the approach of inevitableness.

I long for a remote cabin in the woods stocked with six weeks of food. Enough time to get past Omicron. But the reality is this is not possible for me. Furthermore, what happens when the next variant hits. And the next. Quite depressing.

Psychological Impacts of Mid-January 2022 Milestones

Setting Covid-19 aside, this week is a bit of a hardship from a psychological standpoint. It marks a year since my Mom’s death. Also, the week brings two more birthdays, with one a milestone.

Ten years ago, to mark the mid-century milestone, we travelled to Denver to celebrate in style. We attended the National Western Stock Show and stayed at the historic Brown Palace. Truly a treat! But this year there are no plans to celebrate with a special trip.

Instead, we will stay at home. A shared (the two birthdays are consecutive) chocolate sheet cake with a cooked pecan frosting will be baked. To be honest, I don’t have the rest of the meal planned out. Priorities, right?

What is happening at the Federal Reserve?

If you are still keeping track of your market basket, you know first-hand there is inflation. Price increases are popping up everywhere. In the case of Dollar Tree, the inflation rate is 25%. The Federal Reserve last raised rates in 2018. Isn’t it time? Nay, past time.

But perhaps the Central Bank knows something the rest of us don’t? Or, more likely the Federal Reserve is juggling too much. After all climate change is now part of the task list. Just what will a climate stress test look like for banks? Finally, what prompted the Vice-Chairman to resign just a few weeks before his term ended? Were things that unpalatable? I think the resignation is a statement.

Mid-January 2022 at the Grocery Store

Are your grocery shelves full? Two full weeks went by without Fritos. Thank goodness these chips are not a staple. Furthermore, many substitute goods exist. But Fritos atop homemade chili can’t be beat.

This past trip, cream cheese was sold out as was my favorite kind of grated cheese for pizza. In the case of the former, no direct substitutes. I do not know if the supply problem is at the manufacturing level or is due to transportation glitches. But the chain is broken.

Media pictures show many empty aisles but neither I nor my many relatives have encountered this. Just individual items such as those discussed above. So, it is hard to get a clear picture.

Random Thoughts of Mental Wellness

Think Positive.

Take Calming Breaths Throughout the Day.

Enjoy a Bubble bath with a relaxing beverage.

Spend some time outdoors.

Read for fun.

Eat Dark Chocolate.

Tell someone you love them.

Firefighting: The Financial Crisis And Its Lessons Book Review

Firefighting: The Financial Crisis And Its Lessons is the three person account of The Great Recession and the steps taken to repair the economy. The individuals credited with writing the book are Ben S. Bernanke, Timothy F. Geithner and Henry M. Paulson. The information presented is straightforward. One of the best aspects is the use of the firefighting metaphor to explain the steps taken at the time to mitigate the panic. Furthermore, my own memory of the tumultuous time meshes with the writing. So, the information rings as fact more than opinion.

A Keynesian Approach

Those of you with an economic background can differentiate between a Classical and a Keynesian approach to economic policy. For those of you unfamiliar with the theory, click here for a tutorial. The steps taken during the financial crisis of the Ought’s clearly represent the teachings of John Maynard Keynes. The Federal Reserve led by Bernanke, and the Treasury Department, first shepherded by Paulson during the Bush Administration then spearheaded by Geithner under President Obama, went to great lengths to stop the downward spiral of the economy. Firefighting takes you step by step through the interventions.

I appreciate the book for what I perceive is an honest portrayal of the cause and effect of the crisis. The authors go to great length to posit why some firms survived while others folded.  Since I vividly remember public events as well as personal anecdotes from the time, I feel quite comfortable highly recommending the book.

Firefighting Lessons

In addition to relating the fiscal and monetary steps taken to fight The Great Recession, Firefighting puts forth warnings for the future. The authors have two key concerns. First, the three former public servants are concerned with a loss of power for both the Treasury Department and Federal Reserve. They make a good case for the immediate ability by the agencies to react to future crises.

Second, the authors are duly concerned with the functionality of Keynesian economics. Government intervention in times of crisis is only one-half of the economic theory. Keynesian economics also calls for replenishing the coffers during expansions. This is not occurring. Instead of bringing the deficit down, our debt levels are increasing. Thus, the authors believe, both monetary and fiscal policy will be hampered in firefighting the next economic downturn.

The argument between interference and non-interference in the markets is central to economic philosophy. The debate between the Classical school of thought and the Keynesian Theory is reflected today in our divided politics. I encourage all to read Firefighting including members of Congress.

One of my favorite websites to share with new students of economics is the US Debt Clock. Visiting this site is eye opening. Similarly, Firefighting will also open eyes. For example, the book acknowledges the public relations nightmare of propping up AIG.

Personally, I saw and was offended by the lavish expenditures of AIG during the height of the meltdown. But I did not know the flip side until reading Firefighting. Grudgingly, I admit the intervention was necessary. Thus my appreciation of the work of Bernanke, Geithner, and Paulson. Both for the book and their many sleepless nights a decade ago.