Will the Fed Survive?


The NewCo Daily: Today’s Top Stories

Frankie Leon | Flickr

Nearly a decade of near-zero interest rates have finally kicked the U.S. economy back into gear. Unemployment is down, inflation is creeping up, and the stock market has soared, so it’s time for the Federal Reserve to start raising interest rates again. That, at least, is the consensus of Fed officials, who announced a widely-expected quarter-percent rate hike today (Bloomberg).

In the short term, that will mean higher rates for credit-card borrowers and home and auto loans. (But don’t hold your breath waiting for better return on your savings.) In the long run, it may mean conflict between the independent Fed and the new administration: President Trump has made sky-high promises for economic growth and job creation that are probably impossible to make good on anyway, but they’ll be even harder to fulfill if the Fed is boosting rates.

The larger question for the Fed, writes Eduardo Porter in The New York Times, may be existential: The central bank has long been a target of populist anger. In a tradition that dates back to fights over national banking all the way back to Alexander Hamilton, suspicious heartlanders have never trusted the idea of an independent federal bank keeping its fingers on the monetary-supply controls.

Whether they prefer the gold standard or want more printed money in the system, populists on right and left are united in their distrust of the Fed. All it would take is an act of Congress with the president’s signature to remake the bank’s authority or structure, remove its independence, or get rid of it entirely. That’s easy to imagine an angry Trump getting behind. Even if he doesn’t, he’ll get to name the Fed’s leaders in coming years, and he could easily pack the bank with disruptive or subservient appointments.

All of this only adds to the sense of just how precarious this moment’s prosperity remains. The Fed is willing to raise rates because it sees that “risks appear to be receding” in the global economy (The Washington Post). But what if those risks are just biding their time?

Congress Wants Your Company To Have Your Genetic Profile

“Wellness programs” sound like a great thing: Employers fund checkups and exercise plans to help employees stay healthy. But the concept is getting a lot more complicated than that. Consider a bill that’s moving through Congress now: It would let companies ask employees to undergo “voluntary” genetic testing and share the results — but if they don’t, their premiums will skyrocket (Stat News).

Employers say they’re just trying to clarify conflicting rules under existing laws that make it hard for them to help screen employees for potentially dangerous health conditions. Such screening, they argue, could play an important part in bringing everyone’s health costs down. But critics see a big foot in the door for privacy violations, corporate abuse, and genetic discrimination.

The rules changes are tied to larger healthcare revisions that face a tough road in Congress right now, so they’re not likely to become law overnight (The Huffington Post). But they’re a sign that for many companies, the line between controlling health costs and exploiting employees may be vanishing. In a world where even vibrator makers can’t be trusted to keep their customers’ data secret, it’s probably sensible to worry.

Refugees Are Makers

If you think of refugees only as a cost to society, then you may sympathize with policies and movements that seek to keep them out of your country. So it’s good to be reminded of just how many beloved bits of our collective culture — from Queen’s music to Sriracha sauce to the Mini Cooper — are the product of refugee creativity. (Oh, right: Refugees built Hollywood in the 1930s, too.)

In fact, refugees enrich the world far more than they burden it. Artist Kien Quan’s project, Made by Refugee, collects examples of this principle in action, and even provides us with downloadable “made by refugee” stickers to spread the message (Quartz).

The wider it spreads, the better. Otherwise, we risk leaving the field open for xenophobes and demagogues like Iowa Rep. Steve King, the congressman who tweeted that “We can’t restore our civilization with somebody else’s babies.”

King distrusts refugees. Also, people of different faiths. And people of skin color that doesn’t match his own. None of them can “restore our civilization.” In fact, of course, they built it in the first place — no less than the white Europeans King identifies with, most of whose ancestors were once refugees, too.

“Disobey” Is Now More Than a Bumper Sticker

Last year the MIT Media Lab created a $250,000 prize for disobedience, and it’s now taking nominations for the award (CNN). The lab, led by Joi Ito, is trying to figure out “how can we effectively harness responsible, ethical disobedience aimed at challenging our norms, rules, or laws to benefit society.”

The prize aims to honor “a living person or group … Specifically, we’d like to call out action that seeks to change society in positive ways and is consistent with a set of key principles. These principles include non-violence, creativity, courage, and taking responsibility for one’s actions.”

Send MIT your names here. Or, you know, don’t, if you just have to be contrary.


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