Federal Reserve Board: H.2 Release for Week Ending February 3, 2018; H.4.1 Release (Balance Sheet) for Week Ending February 8, 2018; Two Of Note Items

Of Note–

(1) Millionaire economics “experts” that warn of inflation for any government spending not focused on the rich.

Comment:  Keep in mind that the U.S. Government fully bailed out Wall Street, where the richest 10 percent of Americans now own 84 percent of all U.S. stocks. (Source: Household Wealth Trends in the United States, 1962 to 2016: Has Middle Class Wealth Recovered? Edward N. Wolff, NBER Working Paper No. 24085, November 2017.)

(a) Jason Furman, Ph.D., estimated net worth in 2013 $24.6 million. (Open Secrets)

Observation: Jason Furman’s primary issue with deficit spending is based on “full employment.” Furman believes it is the U3 unemployment rate, 4.1 percent (February 2018). However, the U3 counts people receiving unemployment insurance. After the benefits run out (more or less 26 weeks), the person is no longer counted, whether or not that person has an income-producing job. After 26 weeks, the person seeking work without unemployment insurance payments is counted by the U6 measure. In February 2018, the U6 unemployment rate was 8.2 percent.

With so many left out of the so-called recovery, there is likely room for the government to do more to assist the suffering. As Furman is a millionaire, the idea that people are still broke from the Great Recession’s aftermath seems to be a difficult concept to understand.

Further, Furman believes in austerity, so this stance fits with it–no concern for the suffering. (See also Furman’s support of WalMart.)

Moreover, as the U.S. Government is in charge of its own currency, the notion that it will run out of money or go broke is nonsensical. When Wall Street had paper losses of trillions (bourne mostly by the richest in the United States), none of these economists raised this sort of issue when the government covered those rich people’s losses.



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(b) Steven Rattner, Wall Street financier and multimillionaire ($108 million to $688 million (2009)), who was involved in a pay-to-play scandal, thinks similarly to Furman on the subject of additional government spending and also that wage increases to workers is inflationary. Rattner also favors globalization that has caused suffering to the middle class with the rampant outsourcing of jobs to low-wage countries.

In light of globalization, will the government spending cause inflation or simply allow the people who are suffering to begin to reassemble their lives and merely exist with the basics (food, housing, and clothing)? It is worth a shot to see so that the long-ignored suffering people can finally receive some assistance (that is, jobs).

(2) February 2018 Monetary Policy Hearing.

Monetary Policy Report, February 2018 

The Monetary Policy Report hearings will be held on February 28, 2018,
and March 1, 2018. It will be the first for the new Chairman of the Board, Jerome Powell.

U.S. House of Representatives U.S. Senate
February 28, 2018, 10:00 a.m., House Financial Services Committee March 1, 2018, 10:00 a.m., Senate Banking Committee
Press release: https://financialservices.house.gov/news/documentsingle.aspx?DocumentID=402987 Press release:

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 3, 2018, is below.

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

Category Action Taken
Personnel Division of International Finance — appointment of Shaghil Ahmed, Brian M. Doyle, and Joseph W. Gruber as senior associate directors; Sally M. Davies as associate director; Carol C. Bertaut and Paul Wood as deputy associate directors; and Ricardo Correa, Andrea Raffo, and Robert Vigfusson as assistant directors.
-Announced, January 29, 2018
Regulations and Policies Regulation KK (Swaps Margin and Swaps Push-Out) — publication for comment of interagency amendments that would (1) conform the definition of “Eligible Master Netting Agreement” in the swap margin rule to restrictions adopted in final rules on certain qualified financial contracts of systemically important banking organizations (QFC Rules) and (2) ensure that any legacy swap would not become subject to the swap margin rule if it is amended solely to comply with one of the QFC Rules.
-Approved, January 23, 2018
Enforcement Bank of Gueydan, Gueydan, Louisiana — written agreement issued August 12, 2014, terminated January 25, 2018.
-Announced, January 30, 2018
J.P. Morgan Securities (Asia Pacific) Limited, Hong Kong, China — determination denying the request by Fang Fang, a former institution-affiliated party, for interlocutory review of an order issued by the administrative law judge in connection with an enforcement matter.
-Approved, January 29, 2018
Wells Fargo & Company, San Francisco, California — consent cease-and-desist order against Wells Fargo & Company for unsafe or unsound practices related to the firm’s governance and risk management that led to violations of law, and associated letters.
-Approved, February 2, 2018

Federal Reserve Board: Balance Sheet (H.4.1 Release)

The Board publishes data of factors affecting reserve balances. The digest is called the H.4.1 Release, and they are published every Thursday (or the next business day if the publication date falls on a federal holiday). The release for February 8, 2018, is below.

[Note: The blog will cover the line titled “Total Factors Supplying Reserve Funds.”]

H.4.1 Release–Factors Affecting Reserve Balances

Total factors supplying reserve funds (as of February 7, 2018):  $4,467,962 (in millions of dollars). (On September 26, 2007, this amount was $900,473 (in millions of dollars)).

(See the release for further information.)


Federal Reserve Board: H.2 Release for Week Ending January 27, 2018; H.4.1 Release (Balance Sheet) for Week Ending February 1, 2018; Three Of Note Items

Of Note– 

(1) Janet Yellen completed her term as Fed Chair. CNBC reporter, Steve Liesman, posted photos of the Board’s farewell to Janet Yellen and welcome to the new Chairman, Jerome Powell, on Twitter.

According to Liesman, Yellen will be a “distinguished fellow at the Hutchins Center on Fiscal and Monetary Policy at the Brookings Institution in Washington, D.C.”

(2) Wells Fargo & Co. Before leaving the Board, Yellen signed a cease and desist order for Wells Fargo & Co. 

(3) Atlanta Fed Bank’s board chairman, Mike Jackson, CEO of AutoNation, on Bloomberg radio. On February 1, 2017, I happened to catch Bloomberg’s interview with millionaire Mike Jackson, chief executive officer of AutoNation. According to AutoNation’s 2017 proxy (page 29), Jackson had an executive compensation package valued at $11.1 million (2016).

On Bloomberg, Jackson had a response to a question about the still-low workforce participation rate (that demonstrates why having monetary policy from only corporate management executives, rather than from people from all walks of life, is a bad idea which leads to equally bad policy):

  • Comfort level with the social safety net post-financial crash. (!)
  • Skills gap.
  • Uncertain stance on immigration policy.

Comment:  What caught my attention was the mention of the “safety net.” Jackson did not elaborate on this point and the Bloomberg interviewer did not ask him to explain any of his points. What I do know is that the people of the United States (unemployed and underemployed) of the have not seen the recovery yet.

FRB Atlanta Bd. Member (2018) Title & Company (Ticker) Compensation Package
Michael J. Jackson (chair) Chairman, CEO, & President, AutoNation (AN) $11.1 million (2017 proxy, page 29)
Myron A. Gray (Deputy Chair) President, U.S. Operations, United Parcel Service (UPS) $4.75 million (2017 proxy, page 41)
Robert W. Dumas President & CEO, AuburnBank (AUBN) $153,251 (2017 proxy, page 41)
Thomas A. Fanning Chairman, President, & CEO, Southern Company (SO) $15.83 million (2017 proxy, page 62)
O.B. Grayson Hall, Jr. Chairman & CEO, Regions Financial Corporation (RF) $14.1 million (2017 proxy, page 91)
Gerard R. Host President & CEO, Trustmark Corporation (TRMK) $2.17 million (2017 proxy, page 30)
Mary A. Laschinger Chairman & CEO, Veritiv Corporation (VRTV) $8.3 million (2017 proxy, page 35)
Jonathan T.M. Reckford CEO, Habitat for Humanity International $332,338 (2016 Form 990, part VII)
Elizabeth A. Smith Chairman & CEO, Bloomin’ Brands, Inc. (BLMN) $5.5 million (2017 proxy, page 28)

But it is hard for privileged, rich people to see this point. The Atlanta Fed’s board of directors is dominated by millionaires and corporate executives. Yet, these so-called policymakers refuse to go to the Labor Department’s One-Stop Career Centers to ask the suffering directly about their experience of the U.S. economy (no rich economist’s anecdotes needed).

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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 January 20, 2018, is below.

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

Category Action Taken
Bank Holding Companies Associated Banc-Corp, Green Bay, Wisconsin — to acquire Bank Mutual Corporation, Milwaukee, a savings and loan holding company, and thereby indirectly acquire Bank Mutual, Brown Deer, a federal savings association.
-Approved, January 22, 2018
Regulations and Policies Disaster-Related CRA Consideration — interagency statement granting favorable consideration under Community Reinvestment Act regulations to financial institutions outside of the U.S. Virgin Islands or Puerto Rico for activities to help revitalize or stabilize these areas.
-Announced, January 25, 2018
Savings and Loan Holding Companies Wawel Financial Services, MHC, Garfield, New Jersey — (1) to dispose of its subsidiary, Wawel Bank, Garfield, pursuant to a merger agreement with Spencer Savings Bank, Elmwood Park, and to dissolve following the disposition of Wawel Bank; and (2) for the Board to delegate authority to the Reserve Banks to approve future dissolution requests from mutual holding companies.
-Approved, January 24, 2018
Supervision and Regulation Resolution Plans — issuance of joint letters with the Federal Deposit Insurance Corporation to 19 large foreign banking organizations regarding the firms’ resolution plans due in December 2018.
-Approved, January 23, 2018
Enforcement Putnam County Bank, Hurricane, West Virginia — issuance of a cease-and-desist order and assessment of a civil money penalty upon the consent of Jeffrey R. Davis, a former institution-affiliated party.
-Announced, January 25, 2018

Federal Reserve Board: Balance Sheet (H.4.1 Release)

The Board publishes data of factors affecting reserve balances. The digest is called the H.4.1 Release, and they are published every Thursday (or the next business day if the publication date falls on a federal holiday). The release for February 1, 2018, is below.

[Note: The blog will cover the line titled “Total Factors Supplying Reserve Funds.”]

H.4.1 Release–Factors Affecting Reserve Balances

Total factors supplying reserve funds (as of January 31, 2018):  $4,465,593 (in millions of dollars). (On September 26, 2007, this amount was $900,473 (in millions of dollars)).

(See the release for further information.)


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.

Third Way on “Entitlement Reform”– Assumption that Youth Do Not Care about Social Security, et al. to Trash Those Programs Disgusting, Unacceptable and a Breach of Trust

The Wall Street-backed think tank called Third Way has produced a memorandum (“The Case for Taking Up Entitlement Reform”) urging “entitlement reform”. [The word entitlement suggests welfare, but it does not apply to programs that the taxpayer funds through FICA like Social Security and Medicare (and incredibly federal pensions).] I strenuously disagree with the position of Third Way.

Like true scions of wealth, their position is that borrowing the surplus of the FICA-backed funds is essential to keeping the rich from paying their share of taxes. So rather than paying back what the country has borrowed from the lower classes, the theme is to gut the programs such that they continue to collect money from the working classes but remake the programs so that they do not have to pay out as much to those same contributors.

Third Way uses genteel language, but underlying all of those words is the idea expressed above. As such, Third Way is not a group that should be trusted. Higher-level political leadership is also undeserving of any trust to act properly without citizen intervention.

In the Third Way “entitlement” memo, I found all of the assertions to be disingenuous, but the one stating that young voters do not think Social Security will be there for them one of the worst. The use of youth to justify larcenous acts against FICA-funded programs is immoral and contemptible.

  • People from their first jobs pay FICA taxes.
  • Most people do not earn enough to make a comfortable retirement without Social Security.
  • Only the rich benefit from 401(k) programs.
  • Retirement for the college aged is far away. How Third Way could make such a broad assertion is irresponsible. Who can think about what life will be 40 to 50 years down the road? No one.

Simply because some decrepit polls supposedly opine some supposition does not mean that that assertion means to destroy the FICA-funded programs. Regardless of any polls, federal politicians have a fiduciary responsibility to administer the FICA-funded programs for the benefit of the beneficiaries. Proposing ways to reduce payments to beneficiaries (while collecting the full FICA payment) is unacceptable and a breach of trust.

If the country is declaring default on repaying their FICA debt, then the Congress should repay the working class citizenry in full immediately.

Barack Obama & Third Way: Reports from Deficit and Debt Meeting Heavy on Cuts and Light on Revenues; Negotiators are Mostly Millionaires

It is no wonder that the high-level meeting for deficit & debt discussions will be skewed toward preserving the wealthy. Those who sat in the room have for the most part extraordinarily high net worth. The political structure of the United States is on the verge of obsolescence and great injustice.

The end result of the President’s proposal seems very likely to be horrendous program cuts with cosmetic (little) revenue “increases” offset with tax cuts. So the end result is essentially all spending cuts. The think tank, Third Way, is cheerleading the entire event.

Why is the proposal (to be rushed through Congress) so skewed? It is proposed by millionaires (the participants), who do not wish to pass tax increases on themselves. (How’s that for a conflict of interest?)

Deficit & Debt Meeting Participants


Net Worth (range, 2009)

Pres. Barack Obama $2,251,011 to $7,670,000
Vice Pres. Joe Biden $-309,971 to $488,996
Speaker John Boehner $1,801,094 to $5,340,000
Rep. Eric Cantor $2,175,157 to $7,533,999
Sen. Harry Reid $3,062,056 to $6,707,000
Sen. Richard Durbin $258,038 to $1,700,998
Sen Mitch McConnell $7,102,036 to $32,756,000
Rep. Nancy Pelosi $-7,356,915 to $124,229,990
Rep. Steny Hoyer $298,009 to $697,000
Jacob Lew n.a.
Sec. of Treasury Timothy Geithner $274,021 to $6,065,998
William Daley (Member of Third Way) $15,000,000 (approx.)
Gene Sperling n.a.

Source:  Center for Responsive Politics, www.opensecrets.org.

Federal Government: Current Fiscal Crises Shows the Failings of both the Obama Administration and the Congress

Despite the sentiment of the politicians that they have to address the deficit (difference between revenues and expenses) and the debt (borrowed to pay for expenses beyond revenues), their obsessive focus on federal employees truly demonstrates the failure of the governing structure of the United States.

It does not help that the many members of  the upper levels of our so-called representative government all come from the same high-income, Ivy-League-educated strata of the society that cannot relate to the legitimate issues of the working people. One example of this is that in the discussions involving Vice President Joe Biden and Congress, the only things they can agree on is cutting farm assistance and making low level civil servants only pay a higher portion for the Federal Employees Retirement System (FERS).

The tax system has been ruined by Congress with excessive tax expenditures that overwhelmingly benefit the wealthy and drain off revenues. It has gotten to the point that the tax rates represent a level of taxes that no one pays.

Republicans have the audacity to act like they are fiscally responsible when they declare that the United States is “broke” (it’s not, not as long as it has a system to collect revenue), steadfastly oppose any increase to revenue, believe that cutting all spending will solve the problem of insufficient revenue. The Republican Party’s beliefs stem from the core of their party is wealthy and therefore can pay for all they need and do not wish to pay for the remainder of the society that cannot be “self-sufficient.”

Democrats are no better. I have absolutely no confidence in most of them. Yes, they support some social policy causes, but when it comes to fiscal matters the core of the party are wealthy elites that also do not wish to pay for services used by the majority of the citizenry. While the Republicans parry, the Democrats, generally speaking stay silent (maybe even secretly hoping that the Republicans make some headway). The only time that I have seen the Democrats speak up is when the tides have already turned against the Republicans and they want to ride the waves to victory. They had the Senate, yet lots of policy proposals were left unaccomplished.

With stagnant income and the Congressional intention to shift the burden to those who earn $100,000 or less, the majority of citizens in this should pay close attention to what these politicians do and don’t do.