Comparative Institutional Failure

The common element to our twin crises is that many of the government agencies we thought were keeping us safe and secure—the CDC, the FDA, the Police–have either failed or, worse, have been revealed to be active creators of danger and insecurity. Alex Tabarrok.

Derek Thompson writing at The Atlantic uses my quote as a jumping off point for a good piece on the failure of American institutions. He does a good job of covering the failures of the CDC, the FDA and the police but most interestingly asks why the FED has acted very differently.

While too many American police are escalating encounters like it’s 1990, and the FDA is slow-playing regulatory approval as if these are normal times, and the CDC is somehow still using fax machines, the Federal Reserve has junked old shibboleths about inflation and deficit spending and embraced a policy that might have scandalized mainstream economists in the 1990s. Rejecting the status-quo bias that plagues so many institutions, this 106-year-old is still changing with the world.

Why haven’t other American institutions done the same? Perhaps America’s dependency on old leadership makes our institutions exquisitely responsive to the anxieties and illusions of old Americans. Perhaps the nature of large bureaucracies is to become lost in the labyrinth of mission-creeping path dependency. Perhaps years of political polarization and right-wing anti-science, anti-expertise sentiments have wrung all of the fast-twitch smarts out of the government. Or perhaps we should just blame Trump, that sub-institutional creature summoned from the bilious id of an electorate that lost faith in elites when elites lost their grip on reality.

Whatever the true cause for our failure, when I look at the twin catastrophes of this annus horribilis, the plague and the police protests, what strikes me is that America’s safekeeping institutions have forgotten how to properly see the threats of the 21st century and move quickly to respond to them. Those who deny history may be doomed to repeat it. But those who deny the present are just doomed.

I see three reasons why the FED may have been different. First, the FED is one of the most independent agencies which may help to explain its faster and more adaptive behavior ala Garett Jones’s 10% Less Democracy. Second, and relatedly, the FED pulls a lot of leadership and staff from academia. That gives FED staff an affiliation goal and clique outside of politics which creates mental independence as well as political independence. Third, the FED was also tested in the last crisis and experience with crises helps as we have also seen in Asia tested by H1N1, SARS and MERS more than the US was.

I am not sure which, if any, of these explanations is the most important but I do think that we have a lot more to learn from comparative institutional analysis not just within the US but across countries as well.

Comments

Hi, guys. I have been reading a lot about Hunduism. I was curious. Is it like Christisnity or something? Well, I found out it is actually awful. Hinduism teaches lower classes (called "castes") are inferior and must be dominated by the superior groups. It teaches that war us glorious and that Indians must enslave other peoples. Actually, Hinduism insoired Nazism, which took some of Indian symbols (the swastika and the like). I think it happens to explain a lot about recent Indian aggressive behaviour against its good neighbours, China and Pakistan. It is a war of aggression for territorial aggrandizement. It is like Europe, circa 1939.

This is Thiagos bizarre new obsession.

Isn't it funny how your Indian masters want you to delegitimise dissent?

And all this time I thought Jews ran the world...

My point is, if we show weakness, we will be inviting further Hinduist aggression against civilization.

Respond

Add Comment

Respond

Add Comment

Respond

Add Comment

May I ask the relevance of this comment in this article?

Isn't India reverting to barbarism a kind ofbinstigutional failure in a certain way?

Respond

Add Comment

Respond

Add Comment

Respond

Add Comment

Oh, geez, guys. I do not know much about international politics, but I am somewhat worried about India's aggressive instance and Hinduism supremacist policies. Can't Trump do something about it?

Respond

Add Comment

Thiago being all chummy "Hi guys!" LOL

Respond

Add Comment

Respond

Add Comment

lessee...

1. the Fed has a literally unlimited budget.

2. despite some griping from the wings, the Fed enjoys broad and deep bipartisan support.

3. Fed and Fed staff operate mostly under the radar of media and politics, except the occasional single news cycle.

4. the Fed operates without any clear mission parameters, metrics for evaluation, or definition of success.

5. the Fed is almost entirely free of detail scrutiny and certainly of lawsuits over its every move.

6. of all the agencies described, the Fed is certainly the most captured by the putative subjects of its oversight.

The Fed is not in fact a government agency at all. it is a black box.

That said. I’d like to challenge the definition of success. What exactly has the Fed succeeded at?

They will do whatever necessary to prop up banks and market valuations. they have an unlimited budget and nonexistent legal restraints and virtual secrecy. and broad latitude. the only requirement is that the rich stay rich.

the FDA should be so lucky

A major data point:

The political parties do not argue or fret over Fed appointments. Once appointed, the Fed governors enjoy mostly anonymity and long terms. When the party in power changes, the Fed is generally left alone. No politician except on the fringe spends his/her time ranting and railing against the Fed. The Fed generally always gets what it asks for from Congress. Fed programs have gone over budget by several multiples of their advertised face value.

So, you could argue that this is an indication of success. Ok. Success at what? For whom?

Extra credit: the Fed is not a government agency, but IS backstopped by the taxpayers. The Fed is neither democratic nor transparent. Perhaps what this country needs is more secretive anonymous star chambers, staffed by corporate appointees, with unlimited budgets and only vague and fungible definitions of success.

Respond

Add Comment

Poe’s Law. Wow.

Fed programs have gone over budget by several multiples of their advertised face value.

Lol, imagine believing this is how the Fed works. The ignorance is astounding. Wait till he realizes he has the direction of flow backwards

Fed and Fed staff operate mostly under the radar of media and politics

Lmao. Anything the chair says becomes front page news.

Yes, so the Chair puts out vague and pro-forma bullshit statements, cloaked in opacity and constructed more like koans - which the press duly regurgitates, and which traders fret over like bookies reviewing the injury reports - meanwhile the rest of the nation completely ignores.

If you do not understand how the Fed lending programs balloon beyond their advertised limits, scope, and duration, i cannot help you.

You live in an alternate bizarro reality. The Fed is the most closely watched federal institution, by orders of magnitude in whatever metric you’d prefer to use. Instead of admitting you were incorrect you jump to criticizing the fed statements on a different basis. Mmmmmkay

You still have the sign wrong on the “fed budgets”, try again.

Here’s a hint: which appropriations bill is the fed budget on?

Hint: the Fed is not a Federal agency. It's a sweet deal: access to all our money, without any pesky requirements like Congressional budget allocations or public transparency.

This sort of thing used to bother Libertarians and fiscal conservatives. Oh wait, no it doesn't. That would be like bothering unicorns.

This may be too complicated for you... the Fed is a lending program not a spending program. I'll not bother to try and explain how the terms of lending matter, or how that can constitute stealth spending.

I would have thought you'd understand the significance of the Fed acting as our agent in lending the taxpayer's money out (in lots of hundreds of billions and trillions a whack) might matter in terms of monetizing our faith and credit, choosing winners and losers, or putting the taxpayers at risk for bailouts. But, nah. Nevermind.

Skeptical is right and you are laughably dead wrong, George. The money that the Fed lends out is not "the taxpayer's money." George is right; the Fed funds the Treasury and the taxpayers, not the other way around.

And in fact until this pandemic, it only leant to the Treasury and occasionally other state entities. It did not pick winners and losers. I do not know where you got this ridiculous nonsense you are spouting, but it is ridiculous nonsense, and you are just making yourself look like an utterly ignorant fool.

lol I'm in good company

https://www.bankrate.com/banking/federal-reserve/interest-rate-pause-biggest-winners/

https://www.reuters.com/article/us-health-coronavirus-fed-credit/feds-dilemma-picking-winners-for-4-trillion-in-credit-idUSKBN21L0HR

https://www.cbsnews.com/amp/news/possible-fed-rate-hike-winners-and-losers/

Note I said "until this pandemic," George. This did not go on in the past as you allege. You are not off the hook. Sorry.

Respond

Add Comment

Respond

Add Comment

Respond

Add Comment

Respond

Add Comment

Respond

Add Comment

Respond

Add Comment

Respond

Add Comment

>That said. I’d like to challenge the definition of success. What exactly has the Fed succeeded at?

I'll take it a step further. The FED supposedly "fixed" the financial system via Dodd-Frank and accompanying regulations.

That fix didn't even hold things together in normal times -- the Fed did a $1 Trillion bailout of the repo market in 4Q19 i.e., *before* COVID. At least the CDC/FDA had the grace to fail during a real crisis.

OC,

Oh gag, more nonsense. Dodd-Frank was a law passed by Congress that is supposed to be implemented largely the executive branch, although some of that has been undone since Trump got in (and some of it was blocked earlier by Congress after Dodd-Frank was passed). It put some limits on what the Fed can do (not "the FED," this is some weird creation of Alex's), but the Fed is not the main actor involved in that.

Bailing out the repo market was a "failure"? Hardly. That is the sort of thing the Fed was created to do, stabilize financial markets, and it did so successfully in that case.

You are yet another ignorant fool spouting silly gibberish here.

>Bailing out the repo market was a "failure"? Hardly. That is the sort of thing the Fed was created to do

By that standard, all of our bailouts have really successes in disguise. The S&L crisis, LTCM, and the housing crisis, whatever... because, of course, the *need* the spend all those Trillions of dollars was due to purely extrinsic factors, like aliens or something.

This is fun... the Animas River spill wasn't a failure, the EPA exists to clean up toxic sites. The Euro crisis wasn't a failure; the ECB exists to help member governments run up debts (sadly, this one might be true). The Iraq War wasn't a failure; the Pentagon exists to spend trillions of dollars killing people, and did so gloriously.

Oh vomit, you are becoming even stupider here, OC.

Several of the items you mentioned now were clearly failures of the Fed as they were followed by recessions or other major problems in the economy. The repo bailout last fall was followed by stabilized repo markets and continued economic expansion until the coronavirus hit and tanked the economy. Those you now mention were failures; this one was a success. Deal with it.

Respond

Add Comment

Respond

Add Comment

Respond

Add Comment

Respond

Add Comment

Respond

Add Comment

https://www.stlouisfed.org/on-the-economy/2018/september/fed-payments-treasury-rising-interest-rates

Fed Payments to Treasury and Rising Interest Rates
---
The Fed is a tax collector. The current collections will be around 2% of GDP, they were .6% last time. The tax is collected from regulated banks via the consumer credit channel.

The Fed is a legal tax collector, its function overlapping with right to coin and power to tax via Congress. The Fed collects VAT tax at the consumer end of credit.

The Fed is not independent except that Congress does not formally vote the tax, the power if direct taxation without a vote comes under right to coin. If Congress wants to change the VAT regime they have to alter fed rules.

The Fed vat tax is regressive, harming the poor more than the middle and practically exempting the wealthy.

All economists, libertarian, conservative and progressive all agree that under existential debt situation the Fed should immediately collect a regressive VAT tax.

It is us who are required to read the Constitution and there we shall see the right to apply a vat tax without a vote is quite clear.

The Deficit Myth by Stephanie Kelton

---
Stephanie is the leading proponent of the Fed VAT tax. She believes all taxes should be direct, immediate as needed, applied only to the consumer, and devoid of any need to vote. Thus she has chosen the Fed VAT tax.
Most of the flat earthers like this method, making the Fed responsible for the missing half f their flat earth models.

http://jaredbernsteinblog.com/figures-behind-our-targeting-the-black-rate-essay/

Figures behind our “targeting the Black rate” essay
June 14th, 2020 at 9:18 am
Janelle Jones and I have a new piece coming out wherein we explain why and how the Federal Reserve should target the Black unemployment rate in setting monetary policy.
----
Jared Bernstein, flat earther.
His previous post declared Keynes was right, based on a stistical fluke in the employment data. Rather silly until this next post, he was preparing us for this.

Note that he has completely forgot that the Black community is increasingly locked out of the system by the VAT Fed tax. He will drive that regressive tax from the current 2% to 5% before his fellow economists finally tap him on the shoulder.

He cannot escape, unable to connect dots. Something happens to these people in economics school.

Respond

Add Comment

Respond

Add Comment

What does that say about Society when members expend more effort complaining about something than assisting those that would understand the shortcomings, offer solutions, and assist with the repair. Sounds like ancient Times when civilizations collapsed under their own "participatory democratic rights". Better to fiddle while Society burns than argue about its short-comings.

Yeah. Making a habit of going into coffee shops, seeing a bunch of old people complaining in the corner, listening a bit, asking them what they would do:
4/50 - had a well-thought out answer - usually retired professional
16/50 - had a sweeping simplistic generalization (throw out the bums)
30/50 - "nothing, we just like to complain"
I don't approach these 'groups' anymore.

Respond

Add Comment

Ha. You are not considering the alternative. What else would the under-employed/ under-utilized/ idle-middle-class be doing with their time if not participating in blogs, political debates, and comment-flame-debates on social media? Learning a new skill, language, career upgrade, participating in community development? Hardly. Be comforted. When hours 'semi-productive' online ratio gets more than 2:3 with working hours, just know that we have successfully diverted an 'instigator' to less disruptive ends - Idle hands are the Dems Work.

Respond

Add Comment

Respond

Add Comment

Respond

Add Comment

I don't think that 'safe and secure' is such an 'incontrovertible Good' as it is presented here. The Institutions weighted with such responsibilities would be Nanny-ish and over-reaching to many -- fragile and impotent to others, in the same circumstances.

As an Engineer, I have a certain Duty of Care to various parties. This means acting as any other qualified, experienced, and 'reasonable' Engineer would. It does not obligate me to be a hero. It does not obligate me to be perfect or infallible. It merely asks that I use due process and the skills and judgement of my appropriate experience to protect the Public, my Calling, my Employer, my Client, and my Job, in that order. Ask not of these Institutions that they act better than human beings, more than their experiences, or greater than the limitations for which the legal infrastructure provides. Scream not at god for wrecking the place, just start cleaning it up and pursue future designs that minimize the risk and quantifies the costs.

Respond

Add Comment

The biggest failed institution of all, and by far, is the US news media. It has become a political propaganda movement that actively and shamelessly lies, every hour of every day, for profit.

Alex could point that out, or he could try to get a slice for himself. His choice has been made.

Yes. As we see now it was a horrific mistake to fast track Rupert Murdoch's citizenship application.

Respond

Add Comment

mebbe
but if the democratic party nominates a presidential candidate
with moderate dementia that would probably make them the biggest failed institution

Republicans have twice now so...whatever.

reagans dementia during the second half of his term doesn't seem
as marked as bidens is currently.
somebody should get him to a neurologist

That he's about to be beaten by a senile cipher of a man. But don't worry, he will step down in a year and then you can have President Kamala.

Well yeah, he is that lame. Of course Hillary Clinton was so lame that she was beaten by Trump. But yeah out of the 3, I think Biden is the winner.

Respond

Add Comment

dope and change?

Respond

Add Comment

Respond

Add Comment

Respond

Add Comment

Respond

Add Comment

Respond

Add Comment

Respond

Add Comment

And why is it that I can't just bite into an orange the way I do an apple?
First, comparing a generic "police" with federal regulators is silly. You're already starting out on vague terms.
Second, this only looks at a part of what the Fed does and it's a different function than the CDC or the FDA. As far as I know, the Fed hasn't changed most of its regulatory functions, just its approach to monetary policy. Banks still have to play by the same rules they did last year.
Third, the Fed Board of Governors, which is what you're really talking about despite using the broader term, is a much smaller bureaucracy than the FDA or the CDC. The FDA has almost 15,000 employees and the CDC has almost 11,000 employees. The Board of Governors has about 1,850 employees.

Besides funneling taxpayer money to the banks and laundering the banks' scams back onto the taxpayers, what else does the Fed actually do all day?

Pay academics to issue harmless research papers that no one reads.

No, George, more rank idiotic drivel dribbling out of you. The Fed does nothing with taxpayers' money, and it does not "launder" bank scams "back onto the taxpayers." You are just dead wrong, wrong, wrong, wrong.

you keep insisting this, as if there isn't literally as many Terabytes of analysis out there about this role, as there are trillions of dollars the fed has used to bail out banks and prop up markets

The Fed didn't get that money from taxpayers, they literally created it out of nothing. And the propping up was necessary because without it, each crisis they were fighting would have been far worse.

I tried that approach in Vegas. I got some funny looks.

Whether or not the bailout were "necessary," they were undeniably humongous and existential to the banks.

You are degenerating in plain sight, George. Dragging Vegas so irrelevantly does not make you look insightful or witty, it simply makes you look more like an idiot than you already do.

As it is, you were the one going on about the Fed going beyond its original purpose, but in case you were unaware of it, the original purpose of the Fed was to support the banking system and to keep banks from unnecessarily collapsing. So your complaining about bailouts of banks is really quite priceless.

Respond

Add Comment

...is to show you have no idea whatsoever how the Fed works, what it does, how it does it. You just don't.

You've heard some anti-Fed buzzwords and are now running with them. Not a great look.

Respond

Add Comment

Respond

Add Comment

Respond

Add Comment

Respond

Add Comment

Respond

Add Comment

Respond

Add Comment

Respond

Add Comment

The Fed is not a government agency, but instead a system of private regional Federal Reserve banks. Which the Fed does an excellent job of saying are not like private stock companies, without at any point saying they are actually owned by the federal government - www.federalreserve.gov/faqs/about_14986.htm

The Federal Reserve Board of Governors consists exclusively of government appointees. These appointees decide on monetary policy and also get to appoint the most powerful board members of the regional Federal Reserve banks.

Respond

Add Comment

Respond

Add Comment

Francis Fukuyama: https://www.the-american-interest.com/2013/12/08/the-decay-of-american-political-institutions/

Respond

Add Comment

Apropos police failure, here is another one:

https://www.kmbc.com/article/missouri-highway-patrol-no-gun-found-in-car-of-sedalia-woman-shot-by-deputy-hannah-fizer/32882685

25-year old woman killed for running a red light. No weapon in the car.

THIS HAS TO STOP!

Yeah, I just heard of another police shooting at a Wendy's. The guy was sleeping-SLEEPING-if you can believe that. And for sleeping he was shot and killed.

Never run away from a cop. He will shoot you in the back. Its a death sentence.

Respond

Add Comment

Phinton, Not sure how much of the story you read...but it wasn't *that* cartoonish. But it was still totally overkill, and yet another needless death.

George Floyd was senseless. The Wendy's shooting was not--that shooting was due to a long list of bad and illegal decisions the suspect made.

We need to start assigning blame for police encounters and explain to everywhere where both sides went wrong. The DOJ should critique the tape for everyone. For example, the cop in the Sandra Bland case likely had no reason to ask her to step outside of her car unless he was going to arrest her. But Bland also failed by turning this into world war 3. The DOJ could do everyone a favor by teaching us where a police stop goes wrong and how it escalates.

The guy at Wendy's ran away, then fought the police, then grabbed a cop's weapon, then fired it at the cop, then ran away again. I wish the cops hadn't shot the guy dead, but the guy bears 95% of the responsibility for his death.

He was drunk and 25% over the legal limit. He had been driving. Every municipality requires him to be taken in. This wasn't a judgement call by the cops. They were polite and courteous, and treated him with respect and dignity until he fought and took the weapons.

Respond

Add Comment

Respond

Add Comment

Phinton, I fail to see anything humorous in these events.

Over the last few days, you and other readers here commented on how police in the Wendy’s incident responded properly to the perceived threat. I wonder how you will argue that it was proper to kill a 25-year old unarmed woman.

There's nothing humorous about this. But I am of the belief if you point a weapon at a cop and people reasonable believe the cop's life is in danger, the cop is within his rights to shoot you. That means a gun, knife, a stick, and yes, a taser.

Remember, cops are killed at a per-capita rate about 150x higher than black people. We have about 50 cops killed per year, out of 700K cops. We have about 20 unarmed black people killed by cops per year out of 40M total population.

The more you stack the deck against the cops, the dumber cops you get. If 50% of cops who get into a life or death fight and win are then sent to jail by prosecutors placating a mob, then ALL the good cops leave. And we're only left with the nuts.

A taser put "the cop's life in danger"? Sorry, that is bs.

Respond

Add Comment

Respond

Add Comment

Respond

Add Comment

Respond

Add Comment

I don't know why the patrol officer would have shot her for (presumably) mouthing off at him. Maybe he grew up playing too many video games and thought she would pop back up. But I think people who believe that what the current moment, BLM, the riots, is about - is our country taking a deep and needed dive into why the police are no longer perceived as the friendly neighborhood beat cops of old, real or imagined, the heroes that little boys admire; what changes the police were responding to, that made them change, or appear to have done so, taking on some characteristics less of a standing army than a gang (why, for instance, do departments down here often adorn their armored SUVs in the style of Mexican gangs, skulls and whatnot?); why we have so much gunplay in cities, why the culture is sick, why drugs get a pass, why we incentivize all the wrong things, surreally - are going to be disappointed.

I have seen this hope entertained by only a few black conservatives*, and even they don't seem to care to delve too far into it: they like most seem to feel the contours of the problem lie almost entirely with the police, as if the police are somehow not *of* us.

*Although on the right or libertarian-leaning internet, these guys seem pretty well-known, I assume they have essentially no audience of any size, or influence.

the link suggests the" mouthing off" may have actually been a threat.

" Fizer was shot after she said she had a gun and threatened to shoot the deputy. "

Yes, I saw that. She was obviously unstable, as women often are. But of course, the officer may have taken a more egalitarian, and less patronizing, view of the situation.

Respond

Add Comment

Respond

Add Comment

Respond

Add Comment

Respond

Add Comment

"The FED was also tested in the last crisis and experience with crises helps ..."

Agreed, the Fed already had their failure in a crisis and Scott Sumner has pulled back the curtain on the Fed's failings on NGDP since then.

Where and when did Scott Sumner do that, Jim B? He is regularly overrated by those who run this blog.

Respond

Add Comment

Respond

Add Comment

Why has the Fed been able to avoid mission creep in ways that the CDC has not? Imagine an alternate world where redistribution is seen as social justice and some argue that as an institution with power, the Fed has a moral responsibility to participate in promoting that when issues of the business cycle are not at the forefront. Why didn't we end up with an activist Fed and how can we build institutions less susceptible to mission creep?

lol on the premise that the Fed's mission has not creeped.

FFS, it was part of the formerly obscure and anonymous entity that was suddenly described by Time Magazine as the "Committee to SAVE THE WORLD" (tm).

It went from managing routine overnight borrowing by banks designed to help cover the flows and settlement of checking accounts and business lending without banks veering too far into speculative or reactive imbalances, to overseeing multi-trillion dollar lending programs and emergency security purchase regimes, tasked with propping up the banking system, liquidating the shadow banking system, keeping the mortgage system from cratering, and protecting asset value in all the markets everywhere all the time.

And it did this job by being given an unlimited budget and effectively no scrutiny or regulatory restrictions.

You were actually doing OK on this one, George, until you got to your ignorant drooling last line. No, it is not given a budget, and it does face a lot of scrutiny and some regulatory restrictions, although it is often able to get around some of those.

Respond

Add Comment

Respond

Add Comment

Bingo. I talk to people all the time that want money out of politics. But they also want a government to decide every minute aspect of their life.

You cannot have both. The government should overwhelmingly be operating in the background, in the shadows, gently nudging things in the right direction and when trouble strikes they impress the hell out of everyone with their competence and planning.

Instead, we get a government that appears clownish in handling the day to day, and clueless beyond words when disaster strikes.

Its interesting because as much of a democrat neoliberal shill as I am I have never - and I stress *never* - run into anyone who wanted a government to decide the minutest aspects of their lives.

The minutest aspects of OTHER PEOPLES' lives

+1, yes, the authoritarians always believe that Other People are the problem

Thats not what he said.

Respond

Add Comment

Respond

Add Comment

Respond

Add Comment

> I have never - and I stress *never* - run into anyone who wanted a government to decide the minutest aspects of their lives.

Really? Do you believe a 12 year old girl changing at her local swimming pool should be required to watch a grown man wash his testicles in the shower attached to the changing area? There are people that believe this should be allowed--not just allowed but required. And it's not a small number at all. And they'd like the gov involved. And the gov has gotten involved, from the local level all the way up to the supreme court.

Yeah, when California passed the Little Girls Must Be Forced To Look At Old Goat Balls Act, I knew this gender thing had jumped the shark.

Funny or not, these are the questions that must be answered. I have yet to meet someone that is OK with their 12 year old daughter watching someone wash their testicles.

Okay, since you've repeated that claim now. I'm going to have to ask to see a citation for the girls must watch a man washing his testicles law.

Side question: do men actually do that? I mean, like as a discrete standalone activity, independent of overall bathing? Is there like some kind of special bidet I am unaware of?

Wouldn't that be nice, a waist-level, anatomically-shaped bidet for men. Dip; splash; ahhhhh. With a Girl Scout attendant standing at the ready with warm towels.

Biological men are allowed in women's locker rooms if they believe they belong there. And in a locker room, a man might need to wash if he's in the shower. Have you have not been following the news? Even in high schools this is expected now. You can have a shower room full of breasts and vulvas, and intermingled is a penis.

The bidet for testicles would be nice, if it had a height adjustment button or lever to accommodate older men. That is, for the older guys, you set the height to knee level and dip them in 3 to 4 inches. For the younger guys, you set the height to waist level and skim the surface.

Well, your persistence induced me to look it up. Snopes says the characterization is between Mostly and Fully False.

True story: I once pulled into a gas station bathroom after holding a Big Gulp worth of beverage in my bladder for hours. Then this guy comes in with his little girl maybe 8 or 10 years old and insists she wait behind me while I do my thing and he goes into the stall. She's bawling. Needless to say that gums up the works and so I tuck myself back in and slink back outside with crossed legs.

For the record, I believe that it says in the Bill of Rights that no person, regardless of race creed or gender pronoun, should be forced to watch an old man wash his russets.

Respond

Add Comment

Respond

Add Comment

Respond

Add Comment

Respond

Add Comment

Respond

Add Comment

Respond

Add Comment

Respond

Add Comment

Respond

Add Comment

>Why has the Fed been able to avoid mission creep

Counterexample: Consumer Financial Protection Bureau is located inside and independently funded by the Fed

sent there to die.....

Respond

Add Comment

Respond

Add Comment

Respond

Add Comment

The Fed has done exactly what the politicians wanted it to do, both Trumpists and Dems. If what it did is right or wrong (I personally think it will create a catastrophic run from the dollar) is not really the issue, here. This particular episode sheds zero light on Fed’s independence from political pressure.

Respond

Add Comment

Failure can only be understood in the context of goals. If you understand the goals of the FDA as protecting American pharmaceutical companies; if you understand the role of police as enforcing the racist and classist legal and regulatory structure embedded into this country, you might evaluate their performance differently.

Indeed. I tend to believe that money matters, and that the powerful get what they want more often than not.

So in my analysis, I start with the premise of trying to identify what the definition of success really is. It is of course rarely the same as the stated intent.

In that, I give due credit to the elite, as smart (or at last clever) people with resources who know how to get what they want and the will to do so - and look for the way that the program is in fact meeting the goals of the people who control it.

It's all a matter of asking the right question.

Respond

Add Comment

Respond

Add Comment

https://www.fresnobee.com/news/coronavirus/article243585407.html#storylink=mainstage_lead

Fresno region soars past 8,200 coronavirus cases, including 176 deaths since March
---
My protectorate, gone.

I’m very happy that the Feds have the ability to test about 500,000 people a day.

Isn’t this the info we need?

Respond

Add Comment

Respond

Add Comment

The Fed has the most resources (by a mile)..but that only means it's failure will come last and be the most spectacular.

Respond

Add Comment

Thompson's full-blown case of neomania and his crypto-religious faith in Science and Progress (advertised satisfactorily with obligatory anti-Trump aside in his second quoted paragraph) surely helps make him one The Atlantic's darling cheerleaders and drive-by journalists for the edification of the insular elites astride the DC-to-Boston Corridor.

--and what a way to DIVERT attention from the long-already-failed "institution" of American public education, which over the course of its demise has left the US with an adult population 20% of which is illiterate in English, with another 20% of the US adult population sub-literate. DC-to-Boston elites just never can seem to acknowledge how horrible they've helped make education for the rest of Americans.

Yes, what is most interesting is the sudden declaration that the entire country exhibits systemic racism. NO, sorry, it's blue voters that have voted for the plans that cities have put into place that have kept black families in poverty in spite of LBJ and successors targeting $20T to fix the problem.

This is all on blue voters. They own the fact that the schools in their cities still suck after 50 years. They own the fact that the housing in their cities still sucks after 50 years.

Not all white people are responsible. Just the white people that vote blue year after year after year.

You can say the same thing about the police. Minneapolis is %100 Democrat controlled save the one green and yet somehow despite the fact that the local government has both the power and responsibility to oversee the cops, everything is Donald Trump's fault.

Or, if you prefer its "years of political polarization and right-wing anti-science, anti-expertise sentiments have wrung all of the fast-twitch smarts out of the government."

Respond

Add Comment

Red regions have made non-white equally in all ways to whites sans the 1% by driving whites into poverty and crime?

Where have Republicans and conservatives succeeded for all people?

If they succeeded, why don't they have the benefit of the best economy creating the best opportunity drawing the most in migration of a cross section of America?

Why isn't Kansas the top State economy with the most corporate growth and hiring providing the best jobs for young and old? Pick any Red State and with Red cities as icons of growth, opportunity, and prosperity for all.

> Where have Republicans and conservatives succeeded for all people?

Outcomes for black kids from Utah and Alaska are far better than outcomes for black kids from Illinois, Atlanta, Detroit, Minneapolis, Boston, Seattle, LA, etc.

Atlanta hasn't had a red mayor since the 1800s. The rest aren't far behind.

If a random black kid in Salt Lake City on average has far better outcome than a black kid from Atlanta, might we believe the leaders of the respective cities are the reason why?

Respond

Add Comment

Respond

Add Comment

Respond

Add Comment

Respond

Add Comment

Not Alex's best work. "Why has the Fed changed since Jeff Powell was appointed? I can't imagine what it could be. Here's a list of things that have always been true about the Fed."

The implication that the CDC, by contrast, *is* political and does not draw from academia is quite damning, and I think Alex should back up those assertions if he means them. The current head of the CDC, after all, was a tenured department head at a university, who'd been researching AIDS for much of his career.

Thompson's article is simply ideological covering fire. He knows very well that the CDC has been lavished with funds. He knows it wasn't "right-wing anti-science” that distracted the CDC into exploring racism and athletic injuries. He knows which side of the aisle most CDC career employees come from. He's just lying, and for Alex to endorse this mendacity as "a good piece" is a further disappointment.

Respond

Add Comment

In the case of the CDC it has been effective through other crises. Its failure this time is due to poor leadership. The same is mostly true of the FDA. It is set up for safety, not speed. Leaders need to step in and cut through the safety layers to speed things up, ie the need to do the equivalent of deregulate in a crisis. Again, this didnt happen due to poor leadership. You would think that an administration that claims to love deregulation would have stepped in, but it didnt. Not even clear if they were monitoring or aware of issues.

For the police, they are managed at the local level. Individual departments performed well, others not so well. Should we impose federal level controls on local police? Maybe, but Ido have some misgivings there.

As to the FED, my impression is that they are probably the most independent quasi governmental organization that we have. To the extent that they have been successful, and I think a lot fo us would disagree about it being successful, I would guess that not having to cater too much to POTUS or Congress helps.

Steve

The Fed is to citizen-facing regulation, as Exxon is to 365.org

Respond

Add Comment

The CDC has had plenty of incompetence during other crises. For instance back with Ebola their PPE guidelines were dangerously wrong, in spite of literally decades working with Ebola. Their ability to trace people with known contacts to sick Ebola patients on entry to the country was a whopping "90%".

Like most bureaucracies, the CDC has its good times and its bad. This is unfortunately one of those times where the failures aligned: China lied, the WHO was worse than useless, and the CDC made many failures.

In terms of who is actually running the CDC, eh you might have a few conservatives at the top, but in the main it is just another set of liberal apparatchiks who cannot turn down the cause de jour. Worrying about racism, bullying, and "stigma" has been slowly degrading much of public health for decades.

As far as speed issues, by far and away the biggest drivers of slow responses are lawsuits. Once again we can than the hefty contributions of the ABA, the trial lawyers association, and their bought and paid for representatives for skewing all sense of reasonable risk balancing.

" For instance back with Ebola their PPE guidelines were dangerously wrong, in spite of literally decades working with Ebola. "

We didnt have decades of experience here in the US. Guidelines were quickly changed and we didnt have a lot of spread amongst HCWs. No one gets it right immediately every time. A well lead organization is able to change quickly when needed. The current CDC and FDA cant do that.

"In terms of who is actually running the CDC, eh you might have a few conservatives at the top, but in the main it is just another set of liberal apparatchiks who cannot turn down the cause de jour"

And that CDC, before you added those few at the top has performed very well in many past outbreaks. Overall EBOLA was very well handled, despite the panic among people on the right. So those apparatchiks can and do perform well, when they have good leadership.

"Worrying about racism, bullying, and "stigma" has been slowly degrading much of public health for decades."

Blah, blah. You know nothing about public health but hate liberals. Just say that and stop wasting bandwidth.

Steve

He’s a medical doctor who worked for the federal government for years.

I’m not saying this to argue from (his) authority, I’m saying this to refute your pointless ad hominem “You know nothing about public health but hate liberals.”

Anyways, the method to evaluate whether an agency responded well is to compare it to their equivalent agency in other countries.

Did the CDC do better or worse than Taiwan’s CDC in the Ebola outbreak? I’d say neither, the outcomes were equivalent across the developed world. Which means either every agency acted heroically (nope!), or their performance was meaningless in terms of outcomes.

Now compare to Covid........

Respond

Add Comment

"We didnt have decades of experience here in the US."
So, we had literally millenia of collective experience from the US docs who work with MSF. Is there a particular reason why the CDC should be unable to phone any of the hundreds of docs who have worked in previous Ebola outbreaks to get it right? Is there a reason why the CDC should literally ignore MSF's warnings and just publish wrong guidelines when the people who have direct experience countersay them?

"A well lead organization is able to change quickly when needed."
Then the CDC and FDA have not been well led for a generation. Their contact tracing during SARS was enough to ensure a complete failure for most anything with a slightly more dangerous transmission profile. Or we could go back to 2001 when their Anthrax guidelines were terrible for quite some time after the initial cases.

"And that CDC, before you added those few at the top has performed very well in many past outbreaks. Overall EBOLA was very well handled, despite the panic among people on the right. So those apparatchiks can and do perform well, when they have good leadership."
Nonsense. Their contact tracing was horrid. Their PPE guidelines risked sustained transmission. The were pitifully slow getting any sort of convalescent serum going (in spite of it being a literally century old technique).

In medicine we call these "near misses". You screwed up, but luckily things broke in a way that covered your ass.

"You know nothing about public health but hate liberals. Just say that and stop wasting bandwidth."
Better discontinue my membership in the American Public Health Association then. And quit MSF. And maybe stop stamping FACEP on things.

You can disagree with me, but seriously, saying I know "nothing" is about as silly as you can get.

Respond

Add Comment

Respond

Add Comment

Respond

Add Comment

Respond

Add Comment

anyone moderating comments here??

when you use the phrase "moderating comments"
do you actually mean censoring comments?

Respond

Add Comment

Respond

Add Comment

https://finance.yahoo.com/news/federal-reserve-grapples-with-links-between-monetary-policy-and-income-inequality-133424222.html

“Inequality is something that’s been with us increasingly for more than four decades and it’s not really related to monetary policy,” Powell said in a press conference after the Federal Open Market Committee announced it was holding rates at near-zero.

Powell attributed the divide between the top wage earners and the lowest wage earners to globalization and technological trends that have created a greater skills gap. Powell said higher education would be required to get higher paying jobs, leaving the bottom wage earners without a way to increase compensation if education and new skills are unattainable.

-----
He is lying in the face of a lot of research saying otherwise.
Not only is the Fed collecting a regressive seigniorage tax, but the tax is mostly determined by the primary dealers before hand so their wealthy clients are not surprised. The whole fraud is driven by Post Nixon Shock Syndrome. This is a mass hysteria. suffered by many, if not most, economists. I do not think there is a cure, and the mathematicians are not violating the rules of counting stuff just to keep the hysterics calm.

Respond

Add Comment

But IMHO the Fed failed tragically in 2007 ad 2008. I think it was because Bernake was new at the top job at the Fed and Greenspan would have done much better.

Also we can all certainly agree that the police have been getting better over the last 100 years or so.

The Fed failed in 2004-2006. Greenspan was the main cause, not someone who would do better. The failure to consider bank subsidiary obligations part of a bank's obligations by refusal to close the well-known holes in Section 23A and 23B, the failure to regulate off-balance sheet activity by banks, the failure to make bank holding companies account for guaranty risk on commercial paper dealing special entities--all Greenspan. Add to that letting banks purchase paper fraudulently rated by the rating agencies without consequence.

BY the time it got to Bernacke, the stinking rot was already in place. He did a remarkable job of slowing the bubble's pop, and then getting out of the way for the recovery. One panic when rates were raised for no reason, then quickly reversed. If the Republicans would have allowed the infrastructure spending, recovery would have been faster--oh, I know, oh my god the debt!! Pretty laughable now, huh?

Respond

Add Comment

Respond

Add Comment

Respond

Add Comment

In what way has the Fed junked older views on inflation? The Fed has mostly kept inflation below or at the target since the Financial crisis?

Respond

Add Comment

Are we sure the FED is adapting correctly? I am not so sure, but I am also not sure of my understanding of the details, where the devil is hiding. It seems like unstable inflation and devaluation of my retirement will be the long term outcome.

In the case of the FDA and CDC, as a scientist who has spent half a century dealing with such issues in my animal production businesses, their levels of failure is highly understated. While the FDA protected it fiefdoms over testing approvals by delaying approval of WHO and German RT-PCR tests for 30 days while the virus was doubling in 3 days resulted in a 1000 fold increase in the size of the problem making testing, tracking and isolating an impossible dream. The vast majority (99.9%) of the deaths were caused by the failure of our major governmental institutions.

Meanwhile, the Surgeon General, CDC, and FDA all claimed that masks don't help keep you from getting this virus when all the scientific data said that is does and they demanding that all the industrial N-95 (90% of the production was for industrial use) be commandeered as "absolutely required" by health care workers and themselves. They started the myth that masks only protect other people not the user of the mask to protect the mask supply from civilians.

As an additional insult to the people, I have seen CDC and FDA people making these "protect other people" myths while wearing masks with the little plastic exhale valves that are designed to only protect the user.

The CDC and FDA mandate that N-95 masks only can be reused with a sterilization type treatment that is difficult and expensive (peroxide vapor, etc) when in facilities where only SARS-CoV-2 virus is the pathogen of concern and simple heat treating of masks to 140ºF for 30 minutes in an oven or home clothe dryer for all personal protection equipment including external gowns.

Respond

Add Comment

I rarely believe in heroes that institutions mostly move at their own pace.

Maybe Scott Sumner is the hero. They are slowly adopting everything he's advocated.

Also having been the focal point of the last crisis they had the decade to think about how to respond to that type of situation and even more extreme cases. So they had a full toolkit.

Respond

Add Comment

Unlike most of the rest of the USA executive branch, employees of the Federal Reserve banks are outside the OPM-administered civil service and so are bit more like the Camden police post-reform. So that probably accounts for its ability to meet the extremely low bar of outperforming other USA government entities.

More importantly, the dysfunctional USA Federal Reserve is democratically unaccountable to either shareholders or the public at large. A comparison with the truly excellent Swiss National Bank of the Swiss Confederation is instructive.

Although both banks claim independent status, shares in the Swiss National Bank can actually be bought and sold on the market thereby creating accountability. Shares have been listed at the SIX Swiss Exchange since 1907. And unlike the USA Federal Reserve, the law establishing the Swiss National Bank specifies that it is intended to promote the welfare of the Swiss people, a nationalist provision to be sure but unsurprising in a substantive democracy.

In contrast, purchases of shares in USA Federal Reserve Banks are coerced and shares are not market trade-able. To be a member of the Federal Reserve system, commercial banks must own shares of stock in the 12 regional Federal Reserve banks by law. But owning Reserve bank stock is nothing like owning stock in a private company. These stocks can't be traded. These don't give the member banks voting rights. These pay out dividends mandated by law to be 6 percent. But the banks must return all profits, after paying expenses, to the U.S. Treasury.

The Swiss National Bank also is more accountable because it has a narrowly defined range of responsibilities. Although obliged by the Constitution and by statute to act in accordance with the interests of the country as a whole, its primary goal is to ensure price stability. Primary responsibility for banking regulation in the Swiss Confederation is vested in a single entity, the Swiss Financial Market Supervisory Authority.

In contrast, the USA Federal Reserve is responsible for everything and accountable for nothing, as would be expected in a country with a minimally democratic presidential system of government in which accountability, unlike in a parliamentary system. The Federal Reserve has a hodgepodge of responsibilities, none of which it’s management can be held responsible for. Per Wikipedia, the USA Federal Reserve is tasked with:

“maximizing employment, stabilizing prices, and moderating long-term interest rates. The first two objectives are sometimes referred to as the Federal Reserve's dual mandate. Its duties have expanded over the years, and currently also include supervising and regulating banks, maintaining the stability of the financial system, and providing financial services to depository institutions, the U.S. government, and foreign official institutions.”

And in contrast with the single Swiss bank regulatory authority, and would be expected in the presidential system of no accountability through perpetual blame-shifting between executive and legislative branch, the USA has a botched abortion of a bank regulation system.

Wikipedia lays out the USA banking regulatory farrago nicely:

“A bank's primary federal regulator could be the Federal Deposit Insurance Corporation, the Federal Reserve Board, or the Office of the Comptroller of the Currency. Within the Federal Reserve System are 12 districts centered around 12 regional Federal Reserve Banks, each of which carries out the Federal Reserve Board's regulatory responsibilities in its respective district. Credit unions are subject to most bank regulations and are supervised by the National Credit Union Administration. The Financial Institutions Regulatory and Interest Rate Control Act of 1978 established the Federal Financial Institutions Examination Council (FFIEC) with uniform principles, standards, and report forms for the other agencies.
State regulation of state-chartered banks and certain non-bank affiliates of federally chartered banks applies in addition to federal regulation. State-chartered banks are subject to the regulation of the state regulatory agency of the state in which they were chartered. For example, a California state bank that is not a member of the Federal Reserve System would be regulated by both the California Department of Financial Institutions and the FDIC. Likewise, a Nevada state bank that is a member of the Federal Reserve System would be jointly regulated by the Nevada Division of Financial Institutions and the Federal Reserve.”

The Swiss Confederation’s track record speaks for itself. No amount of rearranging deck chairs by academic intermediators will spare the USA its current fate. A constitutional convention to adopt a substantively democratic and accountable system of governance is necessary to save the ship.

Respond

Add Comment

"the CDC, the FDA, the Police–have either failed or, worse, have been revealed to be active creators of danger and insecurity." I argue they are not failing, but behaving in typical bureacratic fashion. Their behavior just seems worst because of the crisis atmosphere. I say "crisis atmosphere" to make a distinction between the real problems and the media's "crisis."

Respond

Add Comment

I wonder how much effort the FED puts into 8a minority set aside contracting versus the CDC or the FDA. I suspect the failure of the initial Covid-19 test at CDC was due to using a minority set aside contractor because who cared if the test actually worked.

Rather than just barf up your racist prior, you could actually read up on what happened. But willingly wallowing in racist crap means you can't figure that out, I suppose.

Respond

Add Comment

Respond

Add Comment

Alex,

This is a minor squabble, but I would suggest that you not call it the "FED" anymore, which basically nobody calls it. It is generally called the "Fed," as you can see from the vast majority of the comments here, short for "Federal Reserve."

Calling it the "FED" makes that an acronym, suggesting those letters stand for something, which they do not. Or maybe it is the Federal Ecstatic Dingleberry, right?

Respond

Add Comment

What does the FED do? Well, it helps prevent financial panics and financial runs. That's what it did in 2008. Do you see any financial panics or runs? If the answer is no, then they are doing their job. Now, notice what I did. I made a prediction, and then looked at the reality. You can look up what I said going back to Aug. 2008 on this blog because you know who I am. Do not insult my intelligence by making idiotic predictions that we can't conceivably verify because you're using a dumb-assed name or are unwilling to stand behind what you've written. You're pathetic.

Whoa, a bit of over the top egomania here, Donald Pretari. I give you credit for apparently using a real name, but that does not mean that we know who you are, and I can assure you that I am certainly not going to go dredging back here to see what you have said here back to 2008, and I certainly do not remember any of it offhand.

As it is, I googled you, since I do not know who you are. And I still do not as they appear to possibly be two Donald Pretaris, although maybe they are the same. One claims to be an author living in Tacma, Washington, while the other claims to be a whole bunch of things, some of them involving language, and lives somewhere in BC, which is not far from Tacoma, WA. However, mostly google shows you as somebody who comments a lot on Brad DeLong's site as well as here, so this is apparently a major part of your public identity.

If that is the case, well, you just made the same goof Alex did, calling it "the FED," something an author or language expert should know better than to do. Otherwise, presumably you were being sarcastic, since there was a monster financial panic in 2008, and we did have a brief panic earlier this year, now somewhat turned around, with indeed the turning point for the US stock market coinciding with announcements made by Fed leadership. Is this what you meant to say?

As it is, it is quite unclear whom you were addressing when you went off onto a bizarre rant about somebody or other for making predictions while using a "dumb-assed name." This is not a performance to go bragging about in your history of commenting here that occasionally gets into your google record.

Old Boomers yell at clouds and throw childish insults at each other

Love it, +1

It's true, I got irked, which wasn't good. On the other hand, I wanted to make the point that there's no point in pointing out a person that isn't using a real name. If people use a real name, that's all I ask. I've even said using the same pseudonym is fine. But, over the years, I've had people argue with me who changed opinions as well as change their name. But to not understand the importance of checking what a person has been saying over the years is ridiculous.

Frankly, I don't care that you're a professor of economics. I do read your comments. As it happens, I was a graduate student in philosophy at Berkeley, and then ran a bookstore in Berkeley, California called Black Oak Books. I retired at 50 to study languages, read , listen to music, etc. I now live in Ganges, British Columbia. I starting commenting on many blogs in 2008 precisely to show that you don't need to be an economist to talk about economics. I now mainly post on Brad DeLong's blog and this blog because they're my favourites, and that includes the comments. I do it because I enjoy it and I want to support the blogs I like and to still show you don't need to be an economist to talk about economics. If people think I'm an ass, fine. I can take it.

Since you used your own name, I wasn't even talking about you or your comment. There were a couple of comments that bothered me, but to be honest, since they weren't using their own name, I didn't want to debate them. My main point was and still is that you can tell the FED is doing a decent job precisely because there haven't been any runs. My point was that the main criterion I was using was the same one as I used in 2008. Obviously, I wish I had simply said that.

Donald,

We are in complete agreement on how very few commenting on blogs use their real names. I have even been told that I am an idiot for doing so. It also appears that you and are probably mostly in agreement on what has been going on with the Fed (not "the FED," gag! I am an anal journal editor, and this sort of error rubs me the wrong way, especially coming from somebody with your background). I would say that this particular message, aside from being unclear which of the numerous babbling people here not using their names you were referring to, was also, well, not very clearly written. And I do note that there was a pretty sharp run earlier this year, even if the Fed played an important role in halting it.

I stopped looking at DeLong some time ago because he censors and bans too many posts and posters, although he is an intelligent guy.

Respond

Add Comment

Respond

Add Comment

Respond

Add Comment

Respond

Add Comment

Respond

Add Comment

The Fed hasn't changed at all. Its goal is to protect the assets of the wealthy. The whole "inflation" thing was just an excuse to keep wages low lest rising wages take a penny away from a billionaire. As a goof off rentier who does nothing for a living, this is fine by me. Thank you Ronald Reagan and the scum who voted for him.

As for the CDC, they've been politicized lest they come between that billionaire and that penny. Ditto, the FDA. Surely you jest about the police. Their whole point is to keep that penny out of unclean hands.

One of George’s Kameraden

Respond

Add Comment

Respond

Add Comment

The real failure is the Democratic Party's bad policies: bad welfare policies, social policies and taxation policies and failure to correct those bad policies including protecting bad police and kow towing to police unions... in every Democratic controlled city.

More blacks are killed in Chicago by other blacks every week than the police kill in a year. But academia and the media will never acknowledge that. Keep up the Party line. 2+2=5.

That the police kill fewer people than murderers seems a low and dismal bar to celebrate, let alone believe it makes some sort of rhetorical point.

Respond

Add Comment

Respond

Add Comment

Respond

Add Comment

The Fed failed spectacularly in 2008-2016 -- the price level drifted farther and farther from it's 2% PCE target and is doing so again now. It has allowed 5 year inflation expectations to fall from the inadequate 1.5% CPI (PCE =~ 2.5%) to 1.0%. And the reason is that it is NOT independent enough to just follow the law.

Respond

Add Comment

Respond

Add Comment