Barney Frank to Fed: Don’t raise rates before election

Barney Frank, the architect of the landmark 2010 Wall Street reform law and a staunch supporter of Hillary Clinton, says it would be a mistake for the Federal Reserve to raise interest rates before the election.

Fed Chairwoman Janet Yellen roiled markets Friday by announcing that a rate hike is coming soon, sparking sell offs in the Dow Jones Industrial Average and the S&P 500, which recovered some of their losses later in the day.

Frank advised the Fed board not to risk destabilizing markets and perhaps the broader economy a few weeks before Election Day.“I think it would be a mistake to do it this close to the election,” Frank told The Hill. “It will be interpreted, over interpreted.

“What the Fed should do this close to the election is make no waves,” he added. “Unless there was some totally off-the-charts jobs number, doing something this close to the election I think roils the waters unnecessarily.”

Frank’s comments are notable because politicians are watching the Fed’s actions almost as closely as Wall Street.

It is generally thought that a rate hike before the election could be risky for Clinton, who is seeking a third term for Democrats in the White House. A rate hike could make it more expensive to borrow money and could slow the economy and cause stocks to fall.

Indications by the Fed’s board of governors at the year’s start that 2016 would see multiple rate increases set off a mini panic, plunging the Dow to a low of 15,450 — and the S&P 500 to 1,850 — in February. Since Yellen reined back the looming cuts, the markets have rallied to 18,395 and 2,169, respectively.

Frank said a blockbuster jobs report showing the creation of something on the order of 400,000 new jobs might justify action but anything in line with recent job gains would argue in favor of keeping rates level.

While the unemployment rate stands at a healthy 4.9 percent, participation in the job market is only 63 percent — well below norms of the 1990s and 2000s – and earnings for S&P 500 companies have shrunk for six straight quarters.

Some Wall Street heavyweights say Yellen shouldn’t let political considerations interfere with her decision-making.

Jacob Frenkel, the chairman of JP Morgan Chase International and a former Bank of Israel governor, told CNBC Thursday that Yellen would risk politicizing the Fed by waiting until December to hike rates only because of the potential impact on the presidential and congressional races.

“I think it will be a mistake to take into account the political process not because it is irrelevant to the economy but because this will actually be the politicization of monetary policy,” he told CNBC’s Steve Liesman while attending the Fed’s Jackson Hole summit.

Other observers think the Fed will wait because board governors are leery of wading into a political controversy.

“If you want to take politics into account, you probably want to wait until after the election,” said Axel Merk, the president and chief investment officer of Merk Investments.

“Fed officials, especially former ones more than current ones, will tell you that you don’t want to hike just before an election because it’s kind of political,” he added.

He said the Fed “has been looking for every excuse in the book not to raise rates and this may be one of them.”

But Merk said he thinks the Fed will be more motivated by economic factors than political ones in its decision to postpone a rate increase until December or later.

He pointed to the rising Libor rate — the London Interbank Offer Rate — which makes borrowing more expensive for financial institutions that don’t have access to Fed funds to borrow money.

Merk described it as indicative of a tightening of financial conditions that Fed officials will be well aware of and may disincline them to make money lending conditions any tighter.

But some analysts, such as Dick Bove, vice president of equity research at Rafferty Capital Markets, thinks the rising Libor rate will spur the Fed to raise rates sooner rather than later.

He recently told CNBC that “all indications are the fed funds followed Libor rather than the other way around.”

Frank said that decades ago a rate increase before the election might not have mattered so much. But in recent years the financial markets have come to be seen as more and more driven by the actions of central bankers, among whom Yellen is the most powerful.

Raising rates in the midst of conflicting signals on the strength of the economy could spark a frenzy of speculation, Frank warned.

“The economic data is still uncertain. The job numbers are very good but some of the other numbers are not. The downside of a premature increase at this point with an economy that may not have fully recovered is greater than the upside of [raising rates] now,” he said. “If in fact things are very strong, you don’t lose anything by doing it in December.”

From the Hill

(damn, everyone ever connected to the liberal government wants to protect the HITLARY!)

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Reason NOT to watch any games of the NFL that have the NINERS!!!!

“I am not going to stand up to show pride in a flag for a country that oppresses black people and people of color,” Kaepernick told NFL Media in an exclusive interview after the game. “To me, this is bigger than football and it would be selfish on my part to look the other way. There are bodies in the street and people getting paid leave and getting away with murder.”

FEMA Doesn’t Help

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All of our thoughts and prayers are with the people of Louisiana as they recover from last week’s massive flooding. As usually happens after a tragedy like this, Americans are supporting private charitable efforts to help the flood victims.

Sadly, but not unexpectedly, some are also using the floods to score political points.

During his time in Congress, Ron Paul opposed all federal disaster relief — even for natural disasters occurring in his own district — on the basis that federal disaster relief was unconstitutional, immoral, and most importantly ineffective.

Immediately after these votes, Dr. Paul would face a lot of criticism from his constituents and local media, but after a few months constituents would start to say: “Dr. Paul was right. I have had a horrible experience with FEMA. We would be better off if the Feds left us alone.”

FEMA’s bureaucratic and authoritarian method of providing “aid” caused numerous hardships for people already suffering from a disaster. For example, Ron was once told that anyone who dared try to enter their home before FEMA gave them permission would be arrested.

Following Hurricane Ike, FEMA set up a relief station for those displaced by the Hurricane. However FEMA’s relief personnel did not show up until hours after the center was supposed to have opened. FEMA did, however, send out a PR team to assure everyone that they where on top of the situation.
Ike occurred in September 2008, yet in February 2009 our office was still trying to get FEMA to clean up debris from the Hurricane.

My “favorite” FEMA story is one about a man who called to get a tarp placed on his house because his roof was blown off. FEMA put the tarp on the wrong house and when the man was told that FEMA could not fix the problem for a few weeks, he said he and his neighbor could handle it. FEMA told him that if anyone else touched the tarp they would be arrested.
FEMA is a classic case of how a bureaucracies prioritize adherence to their rules and regulations ahead of helping people. They’re also one more example of why, contrary to the claims of our critics, it is those of us who support free markets who are truly compassionate.

In 2001, Dr. Paul explained the problems with FEMA to FOX news:

Even before Hurricane Irene hit the U.S. East Coast, the Federal Emergency Management Agency was preparing to mitigate its devastating impact, spending from its $800 million relief fund to assist communities. But the real disaster may just be the agency itself, Rep. Ron Paul said Sunday.

The Republican presidential candidate, who represents the 14th Congressional District that runs partly along the Gulf of Mexico in Texas, argued that the temporary aid provided by FEMA has helped ruin the economy by creating a false dependency. “FEMA has been around since 1978, it has one of the worst reputations for a bureaucracy ever,” Paul said. “It’s a system of bureaucratic central economic planning, which is a policy that is deeply flawed.”

Paul spoke to “Fox News Sunday” shortly after FEMA Administrator Craig Fugate reviewed a series of actions in response to Hurricane Irene taken on the orders of President Obama. Combined with other recent natural disasters, Fugate said the agency has enough in its immediate bank account to respond to communities seeking help, but how much will be needed afterward is unknown.

Paul said with FEMA on the brink of going broke, it’s time to bury the agency. “We’ve conditioned our people that FEMA will take care of us and everything will be okay, but you try to make these programs work the best you can, but you can’t just keep saying, ‘Oh, they need money,’ … Well, we’re out of money, this country is bankrupt.”Paul added that FEMA is a gross distortion of the U.S. insurance system because it rewards bad behavior. “FEMA creates many of our problems because they sell the insurance because you can’t buy it from a private company, which means there’s a lot of danger, so we pay people to build on beaches, and then we have to go and rescue them,” he said. “It’s so far removed from the market and the understanding of what insurance should be about. Insurance should measure risk, it shouldn’t be a a bailout program endlessly.” The 12-term congressman suggested that the U.S. could recover $2 billion by pulling troops out of the conflict in Libya and applying the money at home. “I propose that we could save a billion dollars from the overseas war mongering, bring half that home, put it against the deficit, and yes, tide people over until we come to our senses.”

Dr. Paul discussed the problems with FEMA with John Stossel in 2o12. Watch the clip here.
Found at Ron Paul (a site you should bookmark and go to daily)

Obama has ordered the Justice Department to use “justice-involved youth” instead of “juvenile delinquent,” and to cease using the word “Negro.”

How this will improve literacy in the ghetto is not clear. He wants schools to suspend black and white students proportionately, being unhappy that blacks are suspended at higher rates. His is the quintessential black point of view: Everything springs from racism, of which blacks don’t have any, and the solution is a federal regulation. Obama never says that black kids ought to study more or that black women ought to behave responsibly in childbearing. He clearly believes them incapable of it, a position is indistinguishable from that of the KKK.

Milwaukee | Fred On Everything

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The Hill-arious Clinton Campaign Chorus (a.k.a. “The Media”)

This is getting funnier and funnier and absurder and absurder.  Every time Trump tweets something AOL News very somberly reports that it has “sparked outrage” among leftists somewhere.  Protect the children!  Put the horses in the barn!  Mayday!  Mayday!  The latest knee slapper has to do with Trump’s promise to reduce inner-city crime to the great benefit of middle-class black people who live there in large numbers.  After the female cousin of pro basketball player Duane Wade was shot dead in Chicago  yesterday, caught in a crossfire between two thugs, Trump said that this is a sad reminder of why African-Americans will vote for him.  Unlike the Obama regime that has run Chicago for years and has done nothing about hundreds and hundreds of shooting deaths there every year, Trump promises to do something other than blaming crime on “racism” or “poverty” and letting criminals off the hook because, after all, “society” is at fault, not them.  This has been the “liberal” mantra about crime for about the past 60 years.  Protecting citizens from criminals rather than protecting criminals from prosecution and imprisonment is what supposedly “sparks outrage” among Hillary-worshipping leftists at AOL and elsewhere in the media.