I had a dream a couple of nights ago that I started to listen to music and almost immediately the music stopped, not of my own doing, and everything in the room disappeared except for the chair I was sitting in. The dream was far more disturbing than it might seem based on my brief description.

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Daring excellent action takes hold,

Think of the hearts excited,

Soaring quickly ultimately alight delighted.

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This Why Evolution Is True post is titled, “Equality vs. equity.” As defined in the first paragraph of the post, I favor the former and definitely not the latter.

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This 2018 post from Marginal Revolution is titled, “Collective action Kills Innovation.” I don’t always agree with Tyler Cowen and Alex Tabarrok, the two Ph.D. economists who have been writing this blog for a long time, but I think the title of the linked post is true at least 80% of the time.

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Postus Interruptus…had to take a break to let in the electricians and let them know what needs to be done. Maybe, maybe, our vendor visits will end by the end of the month, at least for awhile.

 

Seems appropriate in light of recent events to note that on this day in 1933 Federal Reserve member banks were allowed to reopen after President Franklin Delano Roosevelt closed them by proclamation on March 6. From this article:

 

“For an entire week, Americans would have no access to banks or banking services. They could not withdraw or transfer their money, nor could they make deposits.

The crisis had been a long time coming. In the three years leading up to it thousands of banks had failed. But a new round of problems that began in early 1933 placed a severe strain on New York banks, many of which held balances for banks in other parts of the country.”

 

In a text exchange with David Banner (not his real name) about the Silicon Valley Bank (SVB) situation I wrote that no one ever really learns from past mistakes. Society as a whole seems to have a very short memory. I think that stems from, in large part, temporal arrogance and denial. It’s the “This time things will be different” mentality.

Famous investor Leon Cooperman laid much of the blame on what he called “Stupid monetary policy of zero or negative interest rates for a decade.” I don’t really want to get wonky and explain why the abrupt and marked change in Federal Reserve policy regarding interest rates sank SVB. They really didn’t get hurt by exotic and/or risky investments; they just didn’t hedge the duration/interest rate risks in their portfolio.

I believe that we need the Federal Reserve Bank as a lender of last resort when all hell breaks loose. However, the Fed has too much power to be wielded by mere mortals. I believe it was Milton Friedman who advocated increasing the money supply by a fixed amount, say 2.5%, every year. When recession hit, the increase in the money supply would soften the blow. When the economy heated up to the point where inflation was a risk, the modest annual increase would act as a brake.

 

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