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      A lot of mistakes come from assuming rationality means “thinks the same way I do” rather than “reasons from premises I might not share.” Left than 1/1000 economists predicted the financial collapse, because they reasoned from assumptions like “the market is self-correcting” or “housing prices never go down.” (Sometimes both at the same time, which is rarely […]
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A Few Brief Reactions to Day 3 of the Committee Hearings

Today’s House Committee Hearing was not as dramatically powerful as the first two, but television optics are scarcely the most important thing. These continuing hearings form a careful and meticulous developing of the uncovering of an immense threat which runs back from before the election, through January 6, and continuing into the future.

Judge Luttig, who testified in a slow and deliberate manner, said the most powerful thing at the end. He is certain that Trump and his supporters,, or “anyone he anoints to run in 2024,” are determined to do the same thing as he tried to do in 2020 and 2021, which is to overturn the results of the lawful election, and install himself as President.

That is what this is all about, to me. Certainly everything which happened in the recent past is very important, and horrifying, and many people must be punished. But it is not only about reliving the past, trying to figure out exactly what happened, and who did unlawful and terrible things; as was somewhat the case in Trump’s second impeachment, when the sense among some people was that he is about to leave office, so let’s move ahead. Here we are seeing the past as possible omen of an inevitable future, as in a Greek tragedy.

It became even more obvious today, and from information from an informant who was in the Proud Boys, that the terrorists intended to kill Pence, Pelosi, and others. We haven’t yet heard testimony about this, but we already know that they were given private tours of the Capitol, where they could plan their attack, and how to hold the building. That is virtually irrefutable, despite Congressman Loudermilk lying about it.

This was a deadly business, largely plotted out, with the assistance of various people , including the President, various members of Congress, various attorneys, general rabble-rousers, and violent criminals. It took on the nature of a classic drama, written in, or portraying, ancient or medieval history. If we still have a democracy, and historians who are not totalitarian state controlled,, people will study and be horrified by this for centuries, somewhat as the people who can stomach it, watch a history of the rise of the Nazis.

I wish that there were more than three hearings left to be held. This should go on at greater length, but we will have to extrapolate from what we learn, and hopefully it will be pretty easy to do, even for those many people who don”t want to know, or don’t much care. This is living history, of the most unsettling kind, and it is really the culmination of fifty or so years of the Republican Party’s contempt for law, and their will to win at any cost.

It is going to be up to the Department of Justice to carry this through,. There are many people who should be in jail, but of course we know that Trump pardoned many evil and corrupt people, and it could well happen again in 2025, knowing how the Republicans act. And this Committee will not exist after the midterm elections, if Republicans take over. And Liz Cheney, so compelling in these hearings, will likely be out of Congress. Republicans only want to win, and they are always plotting their next steps.

We can’t let it go, we have to continue to follow the money, and the crime, and the violence. It is satisfying to at least get to see this being explored and revealed in these hearings. They are providing the opportunity to focus on all the aspects of it, as the fight between good and evil is highlighted in the most dramatic focus.

The Economy, the Republicans, and the Media

While we are waiting for today’s House Committee hearing to begin, I want to say a few things about economics, not from any expert perspective, but at least some understanding and past history.

For so many years, the interest rate set by the Federal Reserve Bank was around 4%. Do you remember when your first bank account earned about 4%? The rate was usually around 3-4%, and this went on for decades, through ups and downs, inflation and recessions.

Then somewhere in there, Alan Greenspan started to get more aggressive with raising and lowering the Fed Funds rate. Rates were cut by his Fed, and then later by other Feds, down to 2% or lower. This was rationalized by them in various ways. Then after the crash of 2008, brought on by profligate gambling by banks and other such institutions, buying up derivatives of unsecured housing loans which accorded them immense profits, the rates were drastically reduced, down to almost zero.

This meant many things For the tens of millions of people who were retired and intending to live off interest on savings and Social Security, they were in a very bad situation. For twenty years or so, I have read complaints from them, that while the banks that lost trillions got all their money back, the working class retirees were running out of money. Consider that for a couple which might have saved up $500,000 for retirement, and expected to earn 4% on that, or $20,000 a year, they now were getting 1%, if that, or $5,000 a year.

Now, no one was guaranteed 4%, but that rate was in effect for decades. A recent Fed chairman, when asked about that, specifically said that savers were not a high priority of the Fed’s decision making,

Finally, rates started to creep up, to a Fed rate of about 1.75%, far lower than in the past, but something. Then Trump got into office, and wanted the rates to go to zero, and below, as he actually said.

This gave banks free money, and also pushed up the stock market, because people took their money out of non-bearing savings, and gambled on stocks, which often works, but only for a while. Note that the stock market always goes up when rates are about to be, or are, lowered; and always goes down when they are raised. Also note that the stock market is not the proxy for the economy, just for the people who run companies which are traded, and those who invest in stocks. There are tens of millions of people who own no stocks, and are much more interested in savings rates.

So rates were brought down by the Fed, almost certainly due to Trump’s relentless pressure, to a lower rate than in a century. Banks dropped interest rates on CDs to as low as .20%! I’ve seen online ads touting “a great rate” of .25%. That would mean that if you had $200,000 in savings, you would earn $500 a year, and be taxed on that.

So now we have had inflation, which is a complex subject, but pretty clearly a result of the pandemic which cut supply chains, put about 18% of the workforce out of work, and required large government stimulus packages; and then the easing of the pandemic to the extent that unemployment is now at record lows, wages have risen 5% or so, and companies were able to raise their prices to obtain record profits. People rightly complain about gas prices, but the cost of a barrel of oil is less than a year ago, while the cost of gas has doubled in many places, while the oil companies make absolutely record profits.

For reasons of ignorance or desire to help the companies, and to get more Republicans elected, the media has been insistent on talking about inflation every hour. Inflation is not good, but I remember inflation over 10% in past years, and I also note that inflation is higher in Europe than here, because it is all interrelated. But all you hear, is “Inflation!,” as if 8.5% inflation is absolutely ruinous for Americans. It might be, if it went on for a few years, but it has not. And wages for the average worker have gone up an average of 5%, meaning that real wages have gone to -3%, for a while, while companies are making absolutely record profits.

The Fed believes that its mission is to fight inflation, and their basic tool is to raise interest rates, to slow down the overheated economy. So they just raised the base rate .75%, the largest raise since 1994, but of course rates had been at record lows. I recall that 1994 and following were great years for the economy, under President Clinton.

But the media immediately has pivoted to anguishing over the rate rise to 1.5% or so, where it was less than two years ago. They talk about car loans costing more, housing loans being more expensive. Yes, that is what comes when you have abnormally low interest rates now raised back to still very low levels. That is the push and pull of the economy. We have all seen it, but now the media is complaining about all of it–except for the record profits which they almost never talk about.

And the stock market has gone down, and they complain about that, as if there is some guarantee of a 30,000 Dow. Stocks always go down when interest rates are raised. Maybe savers might be able to get 2% on their savings, rather than .25%, and will take money out of the stock market, and into savings accounts.

I was having a brief internet conversation with a guy the other day, who insisted that this was the worst economy he had ever seen. He must have missed the two recessions under Nixon, the inflation under Carter, the two recessions under Reagan, plus having to bail out the Savings and Loan companies; the recession under GWH Bush, the Great Recession under GW Bush which almost crashed the world economy, sent unemployment skyrocketing, dropped the stock market about 60%; then the pandemic which Trump did nothing about but try to ignore, which led to about 18% unemployment.

So now the media says that inflation is terrible; that raising interest rates is terrible, too; as if we should expect to live in an economy where jobs are plentiful, wages rise, interest rates stay low, things cost about the same. That is impossible, although it came close under Clinton.

I well remember Republicans being infuriated by his budget proposal in 1993, which would raise the tax rates on the wealthy by a very small percentage. They said it would wreck the economy, they said this every day. The budget finally passed by the narrowest of margins, and it led to virtually unparalleled good economic times, and a surplus which GW Bush promptly gave away with tax cuts, mostly to millionaires,, and then created a housing bubble which completely crashed.

So that is what infuriates me about the media’s current coverage. That, and the fact that it is geared to cause people to vote for Republicans in five months, somehow believing that they will fix things, which they never do. Their current plan is to cut Social Security and Medicare, to try to get rid of them completely. How much are we hearing about that on the news? Oh, that is for after they take power, when it is too late for the voters to understand?

So that is my little rant, which is the result of hearing story after story from the media about how terrible inflation is, and how terrible it is that the Fed raised interest rates, and what if we have a Recession?! We had two under Reagan, and I didn’t hear them bemoaning that.

While I get upset at this, I will see if I can find some CD accounts which will earn me 2-3%, instead of the .5% or so which they have been earning. I know that this is not as exciting as record company profits, or stock market gains, but they do matter to some people who thought that the American plan was to work hard, save, retire, and earn interest on the savings, plus receive Social Security that they had paid into for a long as they had worked, and which Republicans voted against 90 years ago, and have never stopped trying to take away, because, you know, “Socialism!”