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How The Establishment Will Try To Destroy Trump

TownHall Latest columns - Thu, 12/08/2016 - 11:35
Shortly before Thanksgiving, New York Times columnist Frank Bruni wrote a column that should chill you to the bone. 2016-12-07T15:40:00-05:00 2016-12-08T16:34:57Z Ann Coulter

One China, One Taiwan

TownHall Latest columns - Thu, 12/08/2016 - 10:35
AS a candidate and a president-elect, Donald Trump has compiled a long list of follies, gaffes, and outrages. His phone conversation with Taiwan's president isn't among them. 2016-12-07T11:06:00-05:00 2016-12-08T15:34:56Z Jeff Jacoby

Climate Realists Must Hold Trump’s Feet to the Fire

TownHall Latest columns - Thu, 12/08/2016 - 10:35
2016-12-07T10:36:00-05:00 2016-12-08T15:34:56Z Tom Harris

Trump Starts Draining the Swamp

TownHall Latest columns - Thu, 12/08/2016 - 10:35
Donald Trump promised to drain the swamp when he reached the White House, but Washingtons swamp creatures are putting up a heck of a fight. The people who inhabit the permanent government are doing their best to resist and obstruct the kind of change that Trump promised. 2016-12-07T10:15:00-05:00 2016-12-08T15:34:56Z Andy Schlafly

The Curious Case Of America’s Waning Whites

TownHall Latest columns - Thu, 12/08/2016 - 10:35
An aging white population [is] speeding [up] diversity, blared a headline on The Hill. 2016-12-07T09:29:00-05:00 2016-12-08T15:34:56Z Ilana Mercer

Trump's Problem With Free Speech

TownHall Latest columns - Thu, 12/08/2016 - 10:35
2016-12-07T00:01:00-05:00 2016-12-08T15:34:56Z Jacob Sullum

Navy Leadership – Follow Coast Guard

TownHall Latest columns - Thu, 12/08/2016 - 10:35
Last week, US Coast Guard Commandant, Admiral Paul Zukunft, confirmed he will not follow US Navy Secretary Ray Mabus down the rabbit hole of eliminating traditional ratings for enlisted personnel. 2016-12-07T00:01:00-05:00 2016-12-08T15:34:56Z Robert Charles

Will Cheap Gas Hit the Road?

TownHall Latest columns - Thu, 12/08/2016 - 10:35
Since the OPEC agreement last week to curb production, we've seen gas prices climb every day. 2016-12-07T00:01:00-05:00 2016-12-08T15:34:56Z Dan Celia

Trump clashes with union leader over Carrier deal

Fox News (Politics) - Thu, 12/08/2016 - 09:38
After sparring with Boeing over the allegedly soaring cost of the next Air Force One, President-elect Trump is now clashing over social media with the head of United Steelworkers 1999 – after Jones criticized his deal to discourage air conditioner manufacturer Carrier Corp. from closing an Indiana factory and moving jobs to Mexico.

Facebook and the 'Fake News' Crackdown

TownHall Latest columns - Thu, 12/08/2016 - 09:35
Facebook boss Mark Zuckerberg is under enormous pressure from the left to crack down on the "fake news" circulating on the social-media giant. 2016-12-07T00:01:00-05:00 2016-12-08T14:34:56Z Brent Bozell

ECB Must Apply 'Forward Guidance' Carefully

Cato Recent Op Eds - Thu, 12/08/2016 - 09:23

George Selgin

At its policy meeting today, the European Central Bank is expected to announce that it will extend its current quantitative easing program, which involves the monthly purchase of €80 billion of securities, beyond its original March deadline.

Just what form this extension will take is, however, anything but certain. The right choice may help get the Eurozone on the path to full recovery, but the wrong one could find it riding an unpleasant roller coaster.

Although all the touted plans involve a later deadline, that deadline itself is uncertain (though a six-month extension is most likely). While some officials would have the ECB maintain its current level of purchases, others want it to scale back to a lower monthly amount. Still, others favor letting the value of securities purchased each month vary with changing conditions.

Why should such details matter? They matter because the ECB is playing a difficult (and dangerous) game. It wants to reassure its more hawkish critics, including German representatives on its Governing Council who voted against the current purchases, that its quantitative easing deadlines aren’t meaningless.

The ECB also wants to give the public some “forward guidance,” by committing itself to a definite policy course in the future. Besides countering uncertainty, which itself acts as a drag on investment and growth, an advanced commitment to future easing is intended to enlist the public’s help in boosting spending and interest rates by raising today’s inflation forecasts.

As important as having the right target is, it’s no less important for the central bank to have an unwavering commitment to achieve it.

The danger lies in the fact that central bankers can’t know in advance how much easing will be needed, nor for how long, to achieve their targets. Milton Friedman famously warned that “long and variable lags” separate today’s monetary policy actions from those actions’ future effects on economic activity. 

 Consequently, central bankers, by placing too much emphasis on current conditions, can end up contributing to economic instability instead of combatting it. When central banks commit to future policy actions in advance, as they do when they make use of forward guidance, they’re even more likely to end up regretting their actions.

ecent events illustrate the sort of risks involved. In the U.S., Donald Trump’s election, which was itself a surprise, has been followed by an equally surprising rise in equity prices and interest rates. Of course, the Fed could not have anticipated these developments. 

Suppose that it had committed itself many months before, based on “forward guidance” grounds, to another round of quantitative easing, and that round had been scheduled to last long after the election. The Fed would then have been compelled either to break its promise, or risk pouring more fuel on an already hot equity market.

The ECB finds itself in precisely the opposite situation. Partly in response to recent European political upheavals, it’s poised to extend its commitment to future easing. Who’s to say that Europe won’t enjoy some more favorable news, political or otherwise, in the coming months?

Does this mean the ECB must either leave the public in the dark about its future actions, or risk destabilizing the Eurozone? It doesn’t. There is a way for the ECB, or any other central bank, to provide forward guidance without committing itself to actions that might prove destabilizing.

That solution involves making a firm and credible commitment, not to stick to a particular schedule of securities purchases, but to buy as many securities as it needs to, for as long as it needs to, to achieve a definite policy target.

The target could be 2 percent inflation, or 3 percent nominal GDP growth, or some other economic indicator. As important as having the right target is, it’s no less important for the central bank to have an unwavering commitment to achieve it.

Achievement does not mean committing itself to any particular pattern of quantitative easing because no central banker can possibly know in advance what purchases it may take to reach the central bank’s target.

Instead of announcing a plan to buy €80 billion, €60 billion, or any definite value of securities each month until September or December, the ECB should announce that it will buy as many (or as few) securities as it takes, for as long as it takes, to get the inflation (or spending) rate to a targeted percent, and to keep it there indefinitely.

George Selgin is the Director for the Center of Monetary and Financial Alternatives for The Cato Institute.

Budget bill hinges on legislative stocking stuffers

Fox News (Politics) - Thu, 12/08/2016 - 08:12
What do the Flint, Mich., water crisis; a drought in California; retired Gen. James Mattis; miners’ health benefits; the Oakland warehouse fire; Pearl Harbor Day and efforts to avoid a government shutdown have to do with when Congress can adjourn for the holidays? Everything.

Trump Tower advertising Secret Service protection as amenity for tenants

Fox News (Politics) - Thu, 12/08/2016 - 08:03
It’s now the safest building in New York, because its most famous resident is now the President-elect of the United States. And now, New York real-estate brokers think Donald’s Secret Service detail is a selling point for prospective Trump Tower tenants.

DiCaprio meets with Trump on green jobs to boost economy

Fox News (Politics) - Thu, 12/08/2016 - 08:00
Leonardo DiCaprio and the head of his foundation met Wednesday with President-elect Donald Trump to discuss how jobs centered on preserving the environment can boost the economy.

Boeing brouhaha: The press says Trump is riling up the corporate world

Fox News (Politics) - Thu, 12/08/2016 - 05:00
Donald Trump makes an aggressive move, breaking with the usual practice or protocol, and the media do their rain dance: Why, this is deeply troubling! Things simply aren’t done this way. People are getting nervous. How can you run a government like this?

Rep. Keith Ellison says he'll resign from Congress if elected DNC chair

Fox News (Politics) - Thu, 12/08/2016 - 04:14
Aides and supporters of Barack Obama and Hillary Clinton are searching for an alternative to Rep. Keith Ellison, the early favorite in the race to head the Democratic National Committee, amid growing resistance to his bid.

Bossie: Trump wants 'to be president of all of the people'

Fox News (Politics) - Thu, 12/08/2016 - 02:58
President-elect Donald Trump’s Deputy Campaign Manager said on Wednesday that Trump wants “to show America that he wants to be president of all of the people.”

Trump to nominate EPA critic Pruitt to lead agency

Fox News (Politics) - Thu, 12/08/2016 - 01:30
President-elect Donald Trump announced Thursday that he plans to nominate Oklahoma Attorney General Scott Pruitt – an outspoken critic of the EPA – to lead the environmental agency.

Ohio House committee approves bill banning abortion after 20-weeks

Fox News (Politics) - Thu, 12/08/2016 - 00:01
Abortions would be banned after 20 weeks under a bill that Republican lawmakers hope to pass Thursday and add to legislation already on its way to GOP Gov. John Kasich that would prohibit abortions once a fetal heartbeat is detected.

Trump Combines Art of the Deal and Art of War

TownHall Latest columns - Wed, 12/07/2016 - 23:35
A month after the presidential election, U.S. president-elect Donald Trump has executed his own political "pivot to Asia." 2016-12-07T00:01:00-05:00 2016-12-08T04:34:58Z Austin Bay

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