Neoliberal Economics: A Dismal and Immoral Academic Theory; Long-Term Unemployed Abandoned

In this election cycle, economic uncertainty, delivered to the poor and the middle class, has roiled the two major political parties in the United States–Democrats and Republicans. The 2008 economic crisis and its aftermath robbed the majority of people of stability. The rush to completely rescue the financial sector, that caused the mess in the first place, at the cost of the rest of the population, was horrible to witness.

The abandonment of those afflicted with long-term unemployment, with the termination of the long-term unemployment assistance at the end of 2013, left innocent, hard-working Americans to face financial ruin while the rest of the nation moved on. The politicians abandoned people who were victims of the economic crisis. The politicians, of both parties (many of them millionaires), sowed the wind and are now reaping the whirlwind.

Economists have been the drivers of this system behind the curtain. The chair of the Federal Reserve, Janet Yellen, in a response to Senator Robert Melendez (D-N.J.) at the hearing  for the Monetary Policy Report (at about 1:22:00 in the video), said unemotionally that people unemployed longer than 26 weeks have “lost skills” and that fiscal policy would be best to handle it.

Meanwhile, the monetary policy assumes that the current level of 26-week unemployment is the best situation and has returned to raising interest rates (that is, the Phillips Curve). This was the cruelest statement that Chair Yellen could have uttered; she, the economic profession consensus, and the Federal Reserve System have abandoned the unemployed people of the United States! Notably, this so-called normalcy includes the doubled percentage rate of unemployment for African Americans and Latino Americans. Such “normal” expectations reflect the failure of both monetary and fiscal policy.

This result, where it appears that he people of this country accept such casually dispensed cruelty perplexes me. Perhaps, it is the action of economists promoting this immoral position, covering such an unacceptable result with confounding calculus and statistical formulae, that prevents necessary critique. Such a situation cannot stand any longer.

This blog covered the paper of Economist Alan Krueger, who proposed the abandonment of the long-term unemployed because he concluded that they lost skills and were destined to persistent unemployment. This paper was published shortly after the Congress decided to let the long-term unemployment program lapse. Krueger, a millionaire, could afford to be unconcerned. Alas, he is financially secure. Frankly, I am sickened by an economics profession that has no tie to humanity or any concern for human beings.

Also, some Fed economists dared to suggest that a burst of hiring accompanied the abandonment of the long-term unemployed. Yet, still to the date of the post of this blog, there are still lots of long-term unemployed people (and people who work who worry about their friends and relatives as well as the instability of their own positions.)

Economic stability is the bedrock of a society. Once that is gone, chaos can only take its place.

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Federal Reserve Board: H.2 Release for Week Ending February 20, 2016

The Federal Reserve Board (Board) publishes a weekly digest of its activities on its website. The digest is called the H.2 Release and is published every Thursday. The release for the week ending February 20, 2016, is below.

H.2 Release–Actions of the Board, Its Staff, and the Federal Reserve Banks; Applications and Reports Received

Category Action Taken
Banking Supervision and Regulation Regulation YY (Enhanced Prudential Standards) — (1) approval of requests to exclude certain U.S. subsidiaries from their respective U.S. intermediate holding companies by BNP Paribas, Banco Santander, S.A. (Santander), Credit Suisse AG (Credit Suisse), and Deutsche Bank AG; (2) denial of such requests by Santander, Credit Suisse, Royal Bank of Canada, and Bank of Montreal (BMO) and approval of extension of time for BMO; and (3) approval of requests by The Norinchukin Bank and Mizuho Financial Group, Inc. for exemptions from certain of the U.S. risk-committee requirements.

-Approved, February 18, 2016

Forms Forms — final Board review to extend with revision the Retail Payment Surveys: Depository and Financial Institution Payments Survey (FR 3066a); Networks, Processors, and Issuers Payments Surveys (FR 3066b); Check Sample Survey (FR 3066c); and Retail Payments Survey Supplement (FR 3066d).

-Approved, February 19, 2016

 

 

Monetary and Financial Policy Term Deposit Facility — floating-rate offering of seven-day term deposits with an early withdrawal feature, same-day settlement, and a maximum tender amount of $5 billion on February 18, 2016.

-Announced, February 17, 2016

Regulations and Policies Examination Cycle for Small Insured Depository Institutions — interagency interim final rule with request for comment to adopt an 18-month examination cycle for certain small banks and savings associations, as well as certain U.S. branches and agencies of foreign banks.

-Approved, February 4, 2016

(A/C)

 

Regulation I (Issue and Cancellation of Federal Reserve Bank Capital Stock) — interim final rule with request for comment to change rates paid on dividends to certain Reserve Bank depository institution stockholders.

-Approved, February 17, 2016

Reserve Bank Operations Reserve Bank Officers — reappointment of ten incumbent Federal Reserve Bank presidents and first vice presidents to five-year terms beginning March 1, 2016, in accordance with the Federal Reserve Act.

-Announced, February 19, 2016

Enforcement Centrue Financial Corporation, Clayton, Missouri, and Centrue Bank, Streator, Illinois — written agreement issued December 18, 2009, terminated February 16, 2016.

-Announced, February 18, 2016

 

 

 

Barack Obama: The President Nominates Dr. Carla Hayden to be the 14th Librarian of Congress

The President of the United States of America, Barack Obama, nominated Dr. Carla Hayden, chief executive officer, Enoch Pratt Free Library, Baltimore, Md., to be the 14th Librarian of Congress.

A video introduction for Dr. Hayden follows.

The position of Librarian of Congress has a 10-year term.

Federal Reserve Board: H.2 Release for Week Ending February 13, 2016; Antonin Scalia

The Federal Reserve Board (Board) publishes a weekly digest of its activities on its website. The digest is called the H.2 Release and is published every Thursday. The release for the week ending February 13, 2016, is below.

H.2 Release–Actions of the Board, Its Staff, and the Federal Reserve Banks; Applications and Reports Received

Category Action Taken
Testimony and Statements Monetary Policy — statement by Chair Yellen before the House Committee on Financial Services on February 10 and the Senate Committee on Banking, Housing, and Urban Affairs on February 11, 2016, on the semiannual monetary policy report to the Congress.

-Published, February 10, 2016

 

Forms Forms — initial Board review to extend with revision the recordkeeping and disclosure requirements associated with the Truth in Lending Act (Reg Z).

-Proposed, February 7, 2016

 

Forms — initial Board review to extend without revision certain information collections relating to banking supervision and regulation (G-FIN, G-FINW, Reg Y-1) and to extend with revision certain other such information collections (MSD-4 and MSD-5).

-Proposed, February 8, 2016

 

Forms — final Board review to extend with revision the Semiannual Report of Derivatives Activity (FR 2436) and Central Bank Survey of Foreign Exchange and Derivatives Market Activity (FR 3036).

-Approved, February 12, 2016

 

Forms — initial Board review to extend without revision the Written Security Program for State Member Banks (FR 4004) and Risk-Based Capital Guidelines: Market Risk (FR 4201).

-Proposed, February 12, 2016

 

Personnel Division of Banking Supervision and Regulation — appointment of Tim Clark as deputy director and Anna Lee Hewko as associate director.

-Announced, February 9, 2016

 

Division of Consumer and Community Affairs — appointment of Phyllis Harwell as associate director.

-Announced, February 8, 2016

 

Division of Monetary Affairs — appointment of Fabio Natalucci and Gretchen Weinbach as senior associate directors; Margaret DeBoer, Jane Ihrig, and David Lopez-Salido as associate directors; Mary T. Hoffman and Matthew Luecke as deputy associate directors; and Robert Tetlow as senior adviser; and reassignment of Egon Zakrajsek as senior adviser and Don H. Kim as adviser.

-Announced, February 8, 2016

 

Division of Research and Statistics — appointment of Andrew Cohen and Norman Morin as assistant directors.

-Announced, February 8, 2016

 

Office of Financial Stability Policy and Research — reassignment of William Bassett as deputy associate director.

-Announced, February 8, 2016

 

 

 

Regulations and Policies Regulations C (Home Mortgage Disclosure) and AA (Unfair or Deceptive Acts or Practices) — (1) publication for comment of proposal to repeal Regulation C, which implements the Home Mortgage Disclosure Act, in connection with the transfer of applicable rulemaking authority to the Consumer Financial Protection Bureau under the Dodd-Frank Act; and (2) final rule repealing Regulation AA in view of the Dodd-Frank Act’s repeal of the Board’s rulemaking authority under the Federal Trade Commission Act.

-Approved, January 13, 2016

(A/C)

 

 

 

Reserve Bank Operations Federal Reserve Bank of Philadelphia — appointment of James D. Narron as first vice president and chief operating officer, effective April 1, 2016.

-Approved, February 12, 2016

 

Monetary Policy Report, February 2016

Monetary Policy Report (February 2016): http://www.federalreserve.gov/monetarypolicy/files/20160210_mprfullreport.pdf

U.S. House of Representatives U.S. Senate
February 10, 2016, 10:00 a.m., House Financial Services Committee February 11, 2016, 10:00 a.m., Senate Banking Committee
Press release: http://financialservices.house.gov/news/documentsingle.aspx?DocumentID=400197 Press release: http://www.banking.senate.gov/public/index.cfm/2016/2/semiannual-monetary-report-to-congress
Testimony: http://www.federalreserve.gov/newsevents/testimony/yellen20160210a.htm  (Testimony identical to House version.)

 

Futility of “Colorblindness”: Antonin Scalia (1936-2016)

I have made a small comment on Antonin Scalia after his anti black oral argument in the case of Fisher v. University of Texas. Postmortem, there have been attempts to eulogize him, without commenting on his attitude and beliefs against black people. This is incorrect; his words hurt a whole class of people, who were unable to respond to the abuse of power from the dais of the Supreme Court.

As a result, I have written a comment, postmortem, about his beliefs, including a quote from a Roman Catholic monk, Reverend Thomas Merton. Rev. Merton was mentioned by Pope Francis during his visit to the United States in 2015.

A quote from Reverend Thomas Merton’s book, “Seeds of Destruction” (Letters to a White Liberal), page 19-20:

We have been willing to grant the Negro rights on paper, even in the South. But the laws have been framed in such a way that in every case their execution has depended on the good will of white society, and the white man has not failed, when left to himself, to block, obstruct, or simply forget the necessary action without which the rights of the Negro cannot be enjoyed in fact. Hence, when laws have been passed, then contested, dragged through all of the courts, and finally upheld, the Negro is still in no position to benefit by them without, in each case, entering into further interminable lawsuits every time he wants to exercise a right guaranteed to him by law.

(Note: Emphasis, above (in bold), the blog author’s.)

I included this quote for Scalia and also for the Federal Reserve with regard to the long-running case of Artis v. Bernanke. The quote from 1964 gives context to ongoing beliefs in the present day.

 

 

Antonin Scalia (1936-2016): Legacy Includes Anti Black Sentiment and Elitism in the Selection of His Law Clerks

Associate Justice Antonin Scalia died on February 13, 2016. He was 79.

A quote from Reverend Thomas Merton’s book, “Seeds of Destruction (Letters to a White Liberal),” page 19-20:

We have been willing to grant the Negro rights on paper, even in the South. But the laws have been framed in such a way that in every case their execution has depended on the good will of white society, and the white man has not failed, when left to himself, to block, obstruct, or simply forget the necessary action without which the rights of the Negro cannot be enjoyed in fact. Hence, when laws have been passed, then contested, dragged through all of the courts, and finally upheld, the Negro is still in no position to benefit by them without, in each case, entering into further interminable lawsuits every time he wants to exercise a right guaranteed to him by law.

(Justice Scalia’s work on the Supreme Court fits well within this description.)

The blog has covered Justice Scalia rarely. But the blog’s attention was drawn to the Fisher v. University of Texas due to the commonality of conservative affiliations by Edward Blum (see also http://mediamatters.org/blog/2014/04/08/ny-times-misses-link-between-anti-civil-rights/198784) and Justice Scalia, who mentioned Richard Sanders’ anti black “mismatch” theory during oral argument.

The connection of these men contributed to the unfair, destructive and unjust attack on black citizens from a government forum (that is, Scalia’s “questions” during oral argument and the cultivation of the Fisher case on the docket by Blum).

(Author’s note: The sight of a high-ranking white male justice forming an argument to justify the exclusion of black students, masked by transferring black students to “slower” schools was exasperating and offensive. I will not forget this profound insult.)

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Virginia Slave Law, 1705

In addition, Scalia made it clear that students from non-elite law schools could not become one of his law clerks, despite speaking at a law school that was not in his elite group–American University in Washington, D.C.

 

Document or Quote Blog Post
Fisher v University of Texas (2015 oral argument), pages 67-8 https://alexwdc.wordpress.com/2015/12/11/federal-reserve-board-walter-t-charlton-counsel-for-cynthia-artis-artis-v-bernanke-on-c-span-in-2002-a-note-onjohn-roberts-and-antonin-scalia/
(Selection from blog author’s post (for context). Justice Scalia’s quote is at the end.)

 

It seems that only graduates of “elite” legal education institutions (Harvard, Yale, Stanford) can apply to be law clerks for Justice Antonin Scalia.  Justice  Scalia spoke at American University’s Washington College of Law in May 2009.

 

A student at the event asked what a student that does not go to an “elite” law school needs to do to be successful as a future practicing lawyer. Justice Scalia responded, “Just work hard and be very good.” Fair enough, I suppose.

 

But this advice is not at all sufficient for a non-“elite” law school graduate to be a candidate for a Supreme Court law clerk position in his chambers. Nothing trumps an “elite” law school diploma.

 

‘By and large’, he said, ‘I’m going to be picking from the law schools that basically are the hardest to get into. They admit the best and the brightest, and they may not teach very well, but you can’t make a sow’s ear out of a silk purse. If they come in the best and the brightest, they’re probably going to leave the best and the brightest, O.K.?’

 

 

https://alexwdc.wordpress.com/2009/06/07/supreme-court-for-law-clerk-positions-only-elite-law-school-grads-in-general-need-apply/

Dick Grote: A Comment on the HBS Article, “The Right Way to Fire Someone.” Management Tactic of Transferring Blame to Labor is Unacceptable; Vigilance of these Tactics Obligatory

Knight, Rebecca (2016). “The Right Way to Fire Someone.” Harvard Business Review. February 5.

The article, “The Right Way to Fire Someone,” by Rebecca Knight, is in the Harvard Business Review. This article is pro-management, which is not surprising because Harvard Business School published Dick Grote’s book on forced ranking. The core of the anecdotes in the article is clear: flawed employees and managers forced to endure a firing meetings bravely for the good of the organizations.

Unmentioned, however, are organizations afflicted with poor management yet having the nerve to adopt firing as a way to cover up for their incompetence. Indeed, the blame shifting from management to employees, described previously, is the vehicle used for these firings. (In a story related by Grote, a “suffering but concerned” manager does the termination meeting and instead of having security escort the discarded employee out of the workplace, the manager forces the employee on the “walk of shame,” saying that it is like the manager and employee are walking together as usual. (Yea, right! This is offensive. The manager is lucky that an act of revenge was not implemented on him.) As a result, I do not have any respect for this shameful article.

For example, in case study number one, the ill effect of a management-directed “reorganization” was pushed onto the affected, that is, fired, employee. The manager’s fault for the situation was totally ignored.

In case study number two, a fired employee is found to have “serious deficiencies” after only two years. The “empathetic” manager placed the targeted employee on a performance improvement plan, asked all employees for suggestions to improve everyone’s performance, asked if there were outside causes for the so-called poor performance. Despite all of this effort, the case study asserted, the manager (gasp!) was left wanting!

Underneath all of this hand wringing is the effects of a forced ranking process–identifying targets as poor performers, placing them on a PIP (which will not lead to improvement), then firing the target, blaming them totally for the management-planned-and-expected failures.

Interestingly, this “poorly performing” employee had a load of work that had to be redistributed to those who remained after the culling. This sentence showed, again, the absurdity of rank and yank and why it is a terrible program.