Quantitative Ending

The Federal Reserve Board has announced that it is ending its Quantitative Easing (QE) program.  Monetary policy and Wall Street finance decisions like this one typically make the average person roll their eyes and groan about abstract concepts that don’t seem to affect them — that is, until the failure of poorly conceived financial instruments threaten to bring the American economy to its knees and produce a recession or depression.

So what is QE, exactly?  It began in 2008 and was designed to try to bolster the sagging economy by injecting money and increasing the availability of credit.  A helpful New York Times piece explains QE using charts.  They show that for the last six years, the Fed has been buying bonds — lots and lots of bonds, to the point where it now owns $4.8 trillion of them.  And it hasn’t limited its bond buying to its traditional market of presumptively safe U.S. treasury securities, either.  Instead, it has bought huge sums of mortgage-backed securities, too, to the point where about 40 percent of the Fed’s total portfolio consists of those instruments.  And although the Fed has announced that QE is ending, that really just means that the Fed has stopped buying.  It has no plans to do any selling and will continue to own and hold that $4.8 trillion of bonds.

Why should we care about any of this?  Some people say that, through QE, the Fed just created money out of thin air.  Of course, it has been decades since the “gold standard” applied and dollars could be exchanged for actual gold, and since then dollars and other currencies basically have only had the value that investor confidence places in them.  During the six years of QE bond-buying, inflation has remained under control.  And, in some respects, QE seems to have worked — borrowing costs have declined, the stock market has bounced back, and there has been some job growth since the dark days of 2008-2009, although the economy obviously remains weak.

My views about QE boil down to two thoughts.  First, QE illustrates the enormous extent to which our current form of government places a lot of trust and power in institutions like the Fed.  How would the Founding Fathers react to an unelected board independently making the decision to buy trillions of dollars of financial instruments as part of a specific effort to manipulate the economy?  Second, QE also reveals the puniness of the average American in the face of massive economic forces that are wholly beyond our control.

Many of us have tried to manage our personal financial affairs prudently, with an eye toward building a nest egg that will allow us to some day enjoy a comfortable retirement.  We are like the ants in the tale of the ant and the grasshopper, toiling and husbanding a portion of our earnings while the grasshoppers among us fiddle in the summer sun.  The risk for those of us who are following the path of the ant is that inflation begins to erode the value of what we’ve saved and reduced its ability to allow us to enjoy our golden years.  Has QE increased that risk?  So far it apparently hasn’t, but the jury is still out.  Like ants, we just hope that we don’t get crushed.

Character Study

Sunday night was the series finale episode of HBO’s Boardwalk Empire.  Kish and I have watched the show with pleasure since its inception, and we were very sorry to see it end.  (Spoiler alert:  if you haven’t seen the last episode, you may not want to read this.)

Part of the attraction of this terrific series was its lush recreation of bygone and forgotten places, whether it is Atlantic City in the late 1800s, America in the early days of Prohibition after World War I, or New York City during the grim days of the Depression.  The sense of period accuracy was total, down to the starched collars and spats.  Part of the attraction, too, was the many tremendous performances the show routinely delivered, from Michael Kenneth Williams’ simmering Chalky White, to Jack Huston’s partially masked, tortured Richard Harrow, to Kelly McDonald’s deeply conflicted Margaret Thompson, to Vincent Piazza’s Lucky Luciano, who probably changed more over the more than a decade covered by the show’s story arc than any other character.

It all revolved, however, around Nucky Thompson, as brilliantly portrayed by Steve Buscemi.  The last season, in particular, drilled down to the core of this fabulous character who is loosely based on a real Atlantic City politician.  Through the splices of scenes from his childhood as a straight-laced, polite boy trying to help his sick sister and protect his mother from his abusive father, to his early adulthood as a deputy sheriff trying to lift his family up and making choices that would set his future path, to the fully grown man who was a mixture of master political manipulator, far-sighted visionary, and ruthless criminal, we got to know Nucky as well as you can get to know any TV character.  When Nucky saw the early TV broadcast in the last episode, you just knew that he was looking at it with wonder — but also with an eye toward how he might profit from it in the days to come.

What a complex character Nucky Thompson was!  Consider his relationship with his faithful manservant, Eddie Kessler, who he risked his life to save.  Or his mentoring of Jimmy Darmody, only to turn and kill him in cold blood when Darmody became a rival.  Or his refusal to give up on the ne’er-do-well brother who betrayed him, even to the point of giving Eli a bag of cash (and shaving utensils) so he could clean himself up and reconcile with his wife.  Through it all, Nucky showed a deep understanding of the meaningful people in his life and their motivations, anticipating and defeating their moves against him.

And that’s why I don’t buy the last scene of the show.  I refuse to believe that the Nucky Thompson we came to know could so completely lose touch with the son of Jimmy Darmody and the grandson of Gillian Darmody that he wouldn’t even recognize him and therefore could be shot and killed by him.  Given the significance of the two Darmodys to his life, I think the Boardwalk Empire Nucky would have always kept an eye on the Darmody boy, recognizing him as a potential threat and dealing with it by helping him and co-opting him.  Nucky’s shocking death was a powerful way to end the show, but I just don’t think it was true to the character that I came to know.

Gun Poses

When I graduated from high school in 1975, senior photos were pretty rote.  Guys had laughable and elaborate coiffures and wore loud jackets, girls had hair that was long, straight, and parted in the middle, and that was about it.  The only breakout photo that I remember was of a friend who was a photographer for the yearbook and had his photo taken with his camera cradled in his hand.

In Nebraska, the approach to boring senior class photos is a little bit different these days.

Apparently Nebraska kids want to be photographed with guns.  So one school district had to come up with some rules about whether gun photos would be considered appropriate, and how they might be regulated.  It concluded that gun photos would be permitted if they were “tasteful and appropriate,” didn’t feature students pointing guns at the camera, and also didn’t include an animal in “obvious distress.”

I’m glad they added that last condition to the rule.  Who would want to open their high school yearbook and see poor blasted Bambi or a partially skinned squirrel on the page?  After all, the acne issues and the hair styles are bound to be ugly enough.

Eerie Electoral Indifference

We’re about a week from the midterm election.  Can you feel the excitement?  No?

You can tell that Voting Day is drawing near because the Ohio State football games now feature ads for the well-heeled state and local candidates, showing them in old family photos or walking kids to a park for a little swing while the narrator talks about the need for security.  Ohio State games are the most expensive local TV programming on which to run commercials because they always draw a big audience, so the campaigns tend to husband their resources and run the feel-good ads only on the eve of the election.

IMG_3387Other signs of the impending election come in our mailboxes, both tangible and electronic.  Most of the mail we get these days is political junk mail, with glossy pictures of candidates and urgent descriptions of their qualifications and positions.  Does anyone, even the loneliest shut-in or the most zealous partisan, actually read this drivel?  In our house, it gets automatically pitched into the recycling bin, and the incessant over-the-top email appeals for money, money, money — “Our opponents have launched a new ad!  Won’t you contribute $10 to help us meet our goal?”  — get the same treatment.

But there is one telltale sign that you won’t see, around here at least:  average citizens actually talking to each other about the election.  Instead, there’s an eerie silence about it.  In Ohio, that’s partially explained by the fact that its a midterm election and because the governor’s race and other statewide contests are uncompetitive, but I think something deeper is at play.  Many people, of all political persuasions, seem to be disgusted and disaffected with the political process and would rather disengage than be disappointed by a perceived champion who turns out to be a bumbling, unprincipled hack.  That’s understandable, but dangerous in a democracy.

On November 4, the polls will open, people will vote, and winners and losers will be determined.  How many Ohioans will even care?

2008 Time Warp

IMG_3471In 2008, the President Obama “Hope” t-shirts and posters were everywhere, so popular that the image became iconic.  You don’t see the image much anymore, with President Obama’s approval ratings sinking in the direction of the 40 percent level, according to the Real Clear Politics average.  However, the “Hope” t-shirts are still being sold at a souvenir stand at Reagan National Airport for $12.99 apiece — although they don’t command nearly as much shelf space as brightly colored, generic “Washington D.C.” hoodies.

America Then, America Now

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Yesterday morning in Washington, D.C., I walked past Ford’s Theater.  A small, quaint red brick building among the modern concrete structures of downtown Washington, the theater looks as it did 150 years ago, on that terrible night when Abraham Lincoln was assassinated by John Wilkes Booth.

It’sdownload wonderful that Ford’s Theate still exists; so much of American history has been erased in our never-ending quest for bigger and better that it’s gratifying to see a place that played such an important part in our history has been preserved.  So, too, has the house across the street where our greatest President died, and Edwin Stanton aptly said “Now he belongs to the ages.”

America being what it is, however, you won’t be surprised to learn that, among these sober living memorials to a dark chapter is a cheesy souvenir shop called Honest Abe Souvenir, which was having it’s grand opening as we walked by.  Because, after witnessing the place where American history took a grim turn and a great man breathed his last, who wouldn’t want to buy an Honest Abe mug or T-shirt?

Smell Not Covered

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We got a laugh out of this painfully earnest sign on the inside of a rear passenger window of a D.C. taxi that took us to the airport today.

I’m not quite sure how a cabbie would determine “marital status” or “family responsibility” or “political affiliation” or “source of income” or other non-visible qualities. I do know that if one asked me about any of these topics he wouldn’t need to discriminate against me — I’d never get into a taxi with a complete stranger who asked me such intrusive personal questions. (It’s nerve-wracking enough to trust that complete stranger to drive you to your destination without incident, without wondering whether the personal inquisitiveness means he is a complete nutcase, if not an axe murderer.)

Although the list of protected characteristics is long, it is not exhaustive. It appears D.C cab drivers could still refuse to transport someone who smells awful, or displays visible signs of complete insanity, or is brandishing a hand grenade.