Packing the Judiciary
Many Americans believe that
some of the things which the President and the Executive Branch are doing or
attempting to do are unconstitutional.
To make this point, individuals, organizations and even States are taking
these issues to court by challenging them through litigation. This has traditionally been the way these
things are handled, some of these issues being resolved in lower courts and
some going all the way to the Supreme Court for resolution.
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| Supreme Court Building |
One of the things the
President has been doing is appointing those who agree with him or with
established right-wing groups (such as the Federalist Society) to lifetime
judgeships in Federal Courts, including the Circuit Courts of Appeal and even
the Supreme Court.
This does not bode well for
those who disagree with what they feel are unconstitutional Administration
positions on immigration, health care, gun violence, voting restrictions,
gerrymandering and women’s rights.
Ultimately, these ‘political’ judicial appointments may result in the
reversal of Roe vs. Wade and bring about other ‘conservative’ judicial
victories. That will be a sad day for
the nation, but even sadder, it would illustrate the inadequacies of the
democratic process, as developed in our Constitution, which allowed it to
happen.
Responsibility for this rests
with the United States Senate which approves such judicial appointments. Their approach to this under Senate Leader
McConnell has been purely political. The
Senate refused to even consider a Supreme Court nominee of President Obama
during his last year in office, and the two Supreme Court appointees by
President Trump have been political, first passing a conservative litmus test. The remedy for this problem (and I will be
addressing this in future postings) is for the Democrats to become a majority
in the Senate. That will not undo past
harm which the Senate has permitted to be done to the Judiciary, but it will be
a step forward toward reducing that bias and making the future brighter for
more liberal ideas.
Until that occurs, however,
and there is no guarantee that it will, the nation faces a situation where the
tool of litigation to challenge what many believe are unconstitutional actions
will be significantly blunted if not eliminated entirely. The battle for the courts will have been
lost, the Judicial Branch becoming subservient to the Executive Branch, with
the assent of the Senate. Trump’s lifetime appointments cannot be undone. That
would create a situation falling beyond that of merely being a ‘constitutional
crisis.’ It would take conflict over
these issues into uncharted territory, like those into which the United States
ventured in 1776 and 1860.
Jack Lippman
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Inverted Yield Curves Made
Simple
Let’s say you are sitting on
$100,000 of savings that you don’t want to lose. You’ve decided not to invest it in the casino
known as the ‘Stock Market” but want to keep it safe in something more reliable.
You’ve considered FDIC-insured savings accounts which pay a small bit of
interest (unguaranteed 1.5% to 2% rate) but would like something less volatile. So for such stability, you turn to the bond
market or instruments based upon it, and more specifically, that part of it
which is made dependable by guarantees provided by the United States Treasury:
Treasury Bonds. You might do this by
actually purchasing them or more likely, purchasing shares in a mutual fund or
an ETF (exchange traded fund) with a bond portfolio.
There are many.
When you lend someone your
money, and that’s what you do when you purchase a bond or a financial
instrument based on bonds, the idea has been that you are guaranteed a higher rate the longer you
commit to leaving your money with the bond’s issuer. Why else would someone commit money for ten
years rather than for one or two years or less? To
earn greater interest, of course. That makes sense. The borrower is willing to pay a higher
interest rate when he knows the money is available to him for a longer period. That’s why bonds with more distant maturity
dates pay higher interest rates than ones with less distant maturity
dates. Makes sense, right? Economics 101! Give me your money for ten years and I’ll pay
you 5%. Give me your money for two years and I’ll pay you 3%
(I want to make it clear that at this time
that the fact that bonds can be “traded” will not be addressed. Simply, that means you can purchase or sell an
older bond paying a higher interest rate than is currently available at a
“premium” and that you can purchase or sell an older bond paying a lower
interest rate than is currently available at a “discount.” Bond trading is available through the same
avenues as is trading in company stocks.
But that is not today’s subject.)
But when the United States
Treasury is willing to pay a higher interest rate on the money you lend them
for a shorter period than for the money you lend them for ten years, SOMETHING IS
WRONG! A line graph comparing both
rates over the years should show this clearly.
A bond’s “yield,” its ten-year rate’s line, should consistently be above
the two-year rate’s line (see accompanying chart). But when the point is reached where the lines are
“flip-flopped” and the ten-year interest rate’s line drops below the line for
the two-year rate, this is known as an “inverted yield curve.” And that wasn’t covered in Economics
101.
For those who “follow the
money,” this means that the “market” (which determines bond prices) sees the
long-term economic view as brighter than its short-term prospects, and as a
result, higher interest rates are not necessary to attract investors to
purchase bonds with distant maturities. There is plenty of money going into
such bonds, so higher interest rates are not necessary to sell them. Things
will be safer in ten years and that’s where the bond buyers are looking.
And conversely, the greater
incentive of higher interest rates (or yield) is needed for the “market” to
sell bonds (remember, that means borrowing money) coming due in a shorter
period. Buyers are not so sure how
things will be over the next few years. This suggests a slowing economy in the near
future. Why? A healthy, growing economy looks for more money
from banks to invest in such growth, and since the “market” does not see that
happening soon, higher interest rates are available on shorter maturity bonds
than on bonds with more distant maturity dates. The short term bond “market,” looking for buyers, is willing to pay
more for its loans, apparently seen as riskier or less desirable than long term loans.
That is why historically,
“inverted yield curves” are usually followed by economic recession or
depression, highlighted by unemployment. That’s where we are today. No
one sets these interest rates. They just
develop from the way investors feel about the economy. I’m no economist, but I thought you should
know.
(In case you are unaware of how it works, a bank’s
deposits are far less than the amount of money they lend out to businesses for
investment. They depend upon “overnight”
loans from the Treasury as the ultimate source of most of the money they make
available for businesses to borrow. The
banks’ own interest rates are based on, and of course higher than, the Federal
Reserve Bank’s “prime rate,” which the banks pay to the Treasury. To keep the economy orderly, the Fed monitors
and controls that rate, which is most clearly reflected not only in what it
charges banks, but in what interest rates Treasury bonds pay.)
JL
The President
reportedly spent his last two undergraduate years at the Wharton School of
Finance of the University of Pennsylvania, from which he received their Bachelor
of Science degree in economics. He ought
to understand this stuff! His recent
comments concerning the economy and specifically, the Federal Reserve Bank,
cause me to repeat a question I have raised in previous postings. Did the President actually show up in class
and do the required work to earn his degree?
Were sufficient donations made to Wharton to becloud an answer to this
question? And why has this most
prestigious Ivy League university never awarded an honorary degree to Donald J.
Trump, Class of 1968, its first graduate to reach the Presidency of the United
States? (In this century, honorary
degrees from the University of Pennsylvania have gone to non-alumni Denzel
Washington, John Legend and Jon Bon Jovi but somehow, alumnus Donald Trump was
not so honored. Honorary degrees were
also awarded to Bill Cosby and Steve Wynn, but both have been “rescinded.” Perhaps this explains their hesitation in so
honoring Donald Trump.)
As of point of
information and comparison, Harvard University had awarded honorary degrees to five
presidents of the United States who were
undergraduates there, John Adams, John Quincy Adams, Theodore Roosevelt,
Franklin D. Roosevelt and John F. Kennedy, all awarded before they entered the
White House. as well as to Rutherford B. Hayes who attended law school there.
Other than Trump, the only President who was even remotely connected to the University of Pennsylvania was William Henry Harrison, who died after a month in office from pneumonia contracted at his 1841 inauguration. He never actually graduated from the university, but did attend medical school there for a semester, after which he dropped out and went on to pursue his military career.
Other than Trump, the only President who was even remotely connected to the University of Pennsylvania was William Henry Harrison, who died after a month in office from pneumonia contracted at his 1841 inauguration. He never actually graduated from the university, but did attend medical school there for a semester, after which he dropped out and went on to pursue his military career.
JL
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Online Voter Registration
Know any Floridians one who are NOT registered voters? Refer them to a web site where they can complete the registration process online! Every vote counts. https://registertovoteflorida.gov/en/Registration/Index
ALSO, YOU CAN CLICK HERE TO GET THERE.
ALSO, YOU CAN CLICK HERE TO GET THERE.
And if you are not in Florida, do the same thing wherever you live. It’s all on the Internet somewhere!
JL
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