Is this Bidenomics? “We’re taking advantage of the fact that we have moved quickly to move a little more carefully now,” Federal Reserve Chair Jerome Powell told a gaggle of reporters yesterday in reference to the Fed’s decision not to hike interest rates further. Rates are currently hovering at 5.25–5.5 percent, and the Federal Reserve has, for the past 18 months, been aggressive with raising them in an attempt to cool runaway inflation.
But yesterday, the Associated Press reported that “the 19 members of the Fed’s rate-setting committee conveyed growing optimism that they will manage to slow inflation to their 2% target without causing the deep recession that many economists had feared” (also called a “soft landing”). Powell and the rest of the rate-setting committee did note that rate hikes are still absolutely possible as the year progresses, but that the current state of inflation coupled with low unemployment and strong economic growth means there’s reason for optimism that inflation will cool back down to their target by 2026. “Fed officials now expect their benchmark rate to be at 5.1% by the end of next year, according to their median estimate, up from 4.6% in the last projection round in June,” according to Bloomberg. Basically, it’s shaping up to look like interest rates won’t be hiked higher, but that inflation will likely be around longer than many had previously predicted.
Though this is decent news, remember that President Joe Biden spent much of July trying to convince American voters that he was God’s gift to (working) man via his “Bidenomics” speeches, in which he touted his role in raising pay for low-wage workers while decrying trickle-down economics and taking responsibility for having personally restored the “American dream.” Pretty rich given that my grocery store now charges $8 for a gallon of milk (New York City, baby), that the prices of eggs and meat have gone sky-high, and that plenty of people have deferred home-buying decisions, unable to hack it given the high mortgage rates and large monthly payments that result. If I were him, I would simply not try to act like the economy has flourished under my watch, and demonstrate a bit more humility with regard to how multiple years of high inflation harms both Americans’ budgets and long-term plans and is connected to reckless government spending.
Like a jellyfish: Tuesday and Wednesday’s Republican infighting was at least partially calmed by House Speaker Kevin McCarthy (R–Calif.), who started making concessions to the fiscal hawks. The only problem? This doesn’t necessarily mean that pared-down spending bills will be passed by the Democrat-controlled Senate (quite the opposite, in fact). So it’s possible that by conceding, a government shutdown is more likely.
“Standing in the way of legislation is a shifting group of lawmakers focused on cutting government spending but wielding other demands as well, some of which aren’t shared by other Republicans—such as ending aid to Ukraine,” wrote The Wall Street Journal. “Moderate Rep. Don Bacon (R., Neb.) has dubbed his hard-line colleagues ‘the dysfunction caucus.’ He put their numbers at around five to 10 members, saying the group’s exact makeup changes from vote to vote. ‘Amorphous, like a jellyfish,’ he said.”
The House and Senate will need to pass 12 appropriations bills to fund next year’s government, and their deadline is September 30. Fearing that this won’t happen, McCarthy has also floated a stopgap bill that could buy time for lawmakers to come to an agreement.
I specifically requested the opposite of this: Varshini Prakash, co-founder of the Sunrise Movement (a “youth movement to stop climate change”), endorses Biden’s new plan to employ 20,000 youngsters “to do the essential work of averting a climate catastrophe.” But AmeriCorps-style grassroots activism is almost certainly not the essential work that will avert “climate catastrophe.” That “essential work” is more likely to involve developing nuclear technology or carbon capture and sequestration methods or geothermal drilling. “Republicans have criticized the idea of a climate corps as government boondoggle that would fund pipeline protests with taxpayer dollars,” according to The New York Times, which is conspicuously light on details as to how much this seemingly useless program might cost taxpayers.
Life support for Ron: A CNN/University of New Hampshire poll released Wednesday shows Florida Gov. Ron DeSantis slipping in a crowded field of Republican presidential hopefuls, dropping to fifth place behind Nikki Haley, Chris Christie, and Vivek Ramaswamy (Donald Trump remains top dog). “The campaign for Ron DeSantis is on life support,” veteran New Hampshire Republican strategist Mike Dennehy told Politico. “He has one shot at resuscitation and that is the debate next week.” This month, Vanity Fair went inside the DeSantis campaign turmoil. In July, Reason‘s Eric Boehm explored how cozying up to the “new right” edgelords was a bad call. Takeaway? “He needs to get his ass up to New Hampshire,” one DeSantis supporter told Politico.
Scenes from New York:
I took this picture in my neighborhood, Bedford-Stuyvesant, in Brooklyn. It’s a dilapidated home sorely in need of restoration. This is the type of thing the gentrification debate so frequently misses: Poor neighborhoods are dotted with homes that have fallen into disrepair, and a lot of capital is needed to restore them—capital provided by either developers seeking to profit or by relative newcomers who have the budget to buy a suboptimal property and restore it (often over time), but would not be able to afford a fancier brownstone elsewhere. My own building, for example, had squatters living in it up until 2019. A nearby homeowner I interviewed for a piece on New York City’s terrible new short-term rental regulation said much the same: He lovingly restored his home, at great cost, before renting a portion of it out. Nobody was coming to save these abandoned properties—least of all the city.
“Throughout the Brooklyn neighborhood of Bedford-Stuyvesant, brownstones and tree-lined streets are being destroyed to make way for anonymous glass new luxury buildings, whose skyrocketing rents displace neighbors and further contribute to the neighborhood’s gentrification,” say my neighbors who are engaged in historic preservation efforts for nearby blocks of brownstones. This is a caricature far detached from the reality on the ground, since very few glass luxury buildings have sprung up in our neighborhood and since this activist group also frequently opposes transplants coming into the neighborhood, regardless of which housing stock they choose to take up. There are still lots of people interested in owning a piece of New York City history; in fact, property rights give people the best incentive of all to take good care of these beautiful brownstones (not that the brownstone-restoring transplants are welcomed by opponents of gentrification). Neighborhoods should be dynamic and ever-changing, not preserved in amber, nimbly adapting to the changing needs of the city’s residents, wherever they may have come from. In the future, hopefully lots of tall, multi-unit buildings will spring up and lots of shabby brownstones will be restored to their former glory.
- Today, Zach Weissmueller and I are interviewing Johan Norberg as part of a pandemic retrospective series we’re doing on the Reason Livestream. Watch us here—we air at 1 p.m. Eastern.
- Reports from Rosh Hashanah in Ukraine.
- High interest rates continue to harm small business owners, reports Bloomberg, eroding their margins. “More than two-thirds say that a decline in interest rates of at least 3 percentage points would be needed before they envision business activity rebounding again.”
- Venezuelans who entered the U.S. before July 31 may now be eligible for temporary protected status, which would shield them from deportation and allow them to more easily obtain work authorization. This new protection covers about 472,000 Venezuelans, a massive expansion of temporary protected status which had previously covered some 243,000. Credit where due to Biden.
- A Chinese student who studies at Georgetown University participated in campus events that were critical of the Chinese Communist Party. His father, who lives in China, was taken away by police there and questioned about his son’s disloyalty to the authoritarian regime.
- Do animals talk?
- How tax policy led to the Dutch canal house aesthetic.
- Recruitment is open for Neuralink’s first clinical trial in which it’ll implant brain chips into humans. Neuralink calls the study “a groundbreaking investigational medical device trial for our fully-implantable, wireless brain-computer interface (BCI)” which “aims to evaluate the safety of our implant (N1) and surgical robot (R1) and assess the initial functionality of our BCI for enabling people with paralysis to control external devices with their thoughts.”