Author Archives: Dana Pico

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The plague of public-sector unions

It was actually a minor line in an article by Robert Stacy McCain about Democrats not accepting election results that didn’t go their way, but one I found very important:

Government employee unions are a conspiracy against taxpayers, and when the people of Wisconsin elected (Scott) Walker to fight these unions, Democrats refused to accept the legislative consequences.

As it happens, I still have a Scott Walker t-shirt, from his failed campaign for the 2016 Republican presidential nomination. Yeah, it’s pretty worn and threadbare, but it’s still good for work around the farm in hot, humid Kentucky summers.

Economically, unions in the private sector have to, in the end, be partners with the unionized businesses, because businesses can fail. If the unions demand so much that the business cannot make a profit, the business fails and the unionized employees’ wages drop to $0.00 per hour. And as much as some union leaders hate business, see themselves opposed to corporations, they do realize that a $0.00 per hour wage is possible if they drive the business out of business. Sometimes those private sector unions don’t get it right, as the bankruptcy and failure of Hostess brand demonstrates.

But public-sector unions are different, because the public sector cannot be driven out of business! Where private companies are trying to sell their products to customers who have the ability to choose to buy or not buy their goods, the public sector takes in its revenue through taxation, which is enforced by the law, and ultimately, by law enforcement. If public-sector unions demand so much that the government agencies cannot afford it under their current revenues, the government has the option of raising taxes, to increase its revenues at, in the end, the point of a gun.

Governor Walker tried fighting the public-sector unions, and succeeded, sort of, for a brief time. Governor Matt Bevin (R-KY) tried to get the Commonwealth’s rising retirement indebtedness under control, and the teachers’ unions went absolutely ape, and campaigned so vigorously against him that he lost his bid for re-election, in a very red state, to the odious — anyone who can simply suspend our constitutional rights and get away with it is by definition odious — Andy Beshear, 709,577 (49.20%) to 704,388 (48.83%), a margin if just 5,189 out of 1,442,390 ballots cast.

Public-sector unions have so much power because they are workers in an ‘industry’ that cannot fail, and they are bargaining for contracts with people who have little experience in business and no pressure to keep the ‘company’ in business. That’s why Virginia has become a ‘blue’ state, as wealthier federal government workers have metastasized into northern Virginia, and why public-school teachers are paid significantly more than the median income in the districts that support them.

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Maybe Larry Krasner ought to consider the possibility that not all of the juveniles he treats leniently will turn out to be good guys?

Given that the Philadelphia Police Department already had mugshots of the fine young men who committed the Roxborough High School shooting, the following story from The Philadelphia Inquirer isn’t that much of a surprise. Since juvenile records are normally sealed, we’ll probably never get the story as to for what those young gentlemen were first arrested, unless some good person who can get access to those records leaks the information.

Three teens suspected in the Roxborough shooting committed another murder the day before, police say

Police believe three of the teens responsible for the Roxborough High School shooting committed a separate, unrelated fatal shooting the day before.

by Ellie Rushing and Chris Palmer | Friday, November 4, 2022 | 9:43 AM EDT

Three of the teens accused of shooting five young football players, killing one, outside Roxborough High School in September are expected to be charged with murder in connection with another fatal shooting the day before, police said Friday.

Troy Fletcher, 15, and Zyhied Jones, 17, could face the new murder charges as early as Friday afternoon for the killing of 19-year-old Tahmir Jones in North Philadelphia on Sept. 26, said Deputy Police Commissioner Frank Vanore.

Police also expect to charge Dayron Burney-Thorne, 16, who is wanted in the Roxborough case but remains a fugitive, with an additional murder charge once he is caught.

Around 2 p.m. on Sept. 26, police say, Tahmir Jones was walking in front of his father’s home on the 600 block of North 13th Street when three shooters jumped out of a car and shot him more than 20 times. He was rushed to Jefferson Hospital, where he died a short time later.

Jones had just earned his GED and was working in a construction apprenticeship program, his mother Theresa Guyton has said.

Police stated that the only known connection between the murder of Mr Jones and the Roxborough shootings is the identity of the suspects, and that it is possible that Mr Jones murder was a case of mistaken identity. The Inquirer report stated that shell casings recovered at Roxborough have been forensically linked to three weapons used in “other events.”

It is possible, of course, that the gang members cliques of young men[1]We were reliably informed by The Philadelphia Inquirer that there are no gangs in the city, just “cliques of young men affiliated with certain neighborhoods and families,” who sometimes … Continue reading in the Roxborough shootings were using weapons which they had obtained from other street groups in some sort of trade.

Steve Keeley of Fox 29 News reported via Twitter about what was apparently a gun battle in the Frankford neighborhood. By the time was all said and done, over 170 shell casings were found by police.

This is the culture of the combat zones of Philadelphia! 170 or more shell casings found, but “far outnumbered” by orange needle caps.

To fix the violence, you have to fix the drug problem, and the cultural problem that enables people to use drugs, and think that blowing away your enemies, or even just someone who has pissed you off in the moment, is a good idea.

References

References
↑1 We were reliably informed by The Philadelphia Inquirer that there are no gangs in the city, just “cliques of young men affiliated with certain neighborhoods and families,” who sometimes had “beefs” with other cliques, so we must replace the term “gang-bangers” with “cliques of young men” or “clique beefers”. District Attorney Larry Krasner and his office seem to prefer the term “rival street groups“
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Lies, damned lies, and statistics. Did Philadelphia Police lie about there being 'only' 499 murders in 2020?

On January 4, 2021, I posted the article, “Killadelphia reaches the milestone: I didn’t think they’d make it, but they did: 502 homicides in 2020.” That soon went out of date, because the Philadelphia Police Department changed the figure on their Current Crime Statistics page to 499 homicides in 2020. I couldn’t prove that they had initially reported 502 killings; it was something that I remembered, but in a truly rookie mistake, I failed to consider that the political powers that be, including Police Commissioner Danielle Outlaw — she is a political appointee of Mayor Jim Kenney (D-Philadelphia), not an officer who rose up in the ranks of the PPD, might not want that number to break 500, and the previous record of 500 set under Mayor Wilson Goode (D-Philadelphia) of the MOVE bombing fame during the crack cocaine wars of 1990.

Well, if I made that mistake, someone obviously smarter than me did not. In a Twitter thread started by Philly Crime Update, Sergeant Mark Fusetti, retired from the PPD’s Warrant Unit, wrote:

500 for the 3rd straight year is all but certain. And yes I’m counting the 499 of 2020 as 500 because it actually was

To which I replied:

When I checked https://phillypolice.com/crime-maps-stats/ on January 2, 2021, it said that there had been 502 homicides in 2020. The next day it was down to 499. Did they make a mistake and include January 1 killings, or did they move 3 homicides into 2021, so 2020 wouldn’t hit 500?

Sgt Fusetti responded:

A Deputy Comm made them change it. I’m told they were investigating him for it but he resigned for health reasons

Me again:

Not much of a surprise; I just wish I’d thought to screen capture it when it happened. The city’s shooting victims database shows three fatal shootings on January 1, 2021, times 0030, 0536 and 0538. https://data.phila.gov/visualizations/shooting-victims

A commenter styling himself Over Salted Pretzel — as though a Philly pretzel could ever have too much salt; usually they are undersalted — added:

The 2020 incident CSV file from here lists 500 criminal homicides: https://opendataphilly.org/dataset/crime-incidents

And then I got a tweet from NDJinPhilly with the screenshot I failed to get:

So, what really happened? Was the real number 502, and then someone — perhaps the Police Deputy Commissioner Sgt Fusetti mentioned — didn’t want the City of Brotherly Love to top the 1990 record, and make Mayor Kenney, District Attorney Larry Krasner, and Police Commissioner Danielle Outlaw look even worse than they already did, and ‘shifted’ the numbers in 2021, never imagining that 2021 would not only break the record, but blow it to pieces, with 562.

Or was the 499 number accurate, and someone made a misgoof and added the three homicides on New Year’s Day of 2021 into the 2020 numbers, which had to be corrected?

I don’t know the answer to that, and (probably) couldn’t prove it if I did. But whether falsification of data was involved or not, it’s too easy to believe that in the corrupt Philly government it could have happened.

As of 11:59 PM EDT on Monday, November 1st, the Philly Police have reported 447 homicides, in 305 days. That averages out to 1.4656 killings per day, or a projected 534.93 for the year. If that’s the final number, even if 499 for 2020 is accurate, the last three years will have seen 1,596 murders, or an average of 532 per year. Only Philadelphia Democrats could claim that such is a good record.

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The Fed finally admits it: they don’t know what they are doing! Fighting Bidenflation by causing a recession

The Federal Reserve’s Board of Governors once again raises interest rates to try to fight inflation, but they’ve admitted what people who pay attention to economics already knew: the Board don’t really know what they are doing, or what effects their decisions will have. From The Wall Street Journal:

Fed Approves Fourth 0.75-Point Rate Rise, Hints at Smaller Hikes

Officials signal a possible slowdown in the pace of rate rises by acknowledging how increases influence the economy with a lag

by Nick Timiraos | All Soul’s Day, November 2, 2022 | 2:31 PM EDT

WASHINGTON—The Federal Reserve lifted interest rates by 0.75 percentage point to combat inflation and signaled plans to keep raising them, though possibly in smaller increments.

Members of the Fed’s rate-setting committee acknowledged Wednesday that it could take time for their rate increases this year to be reflected in the economy, and they indicated they might reduce the size of coming hikes. “In determining the pace of future increases in the target range, the committee will take into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation,” they said in a statement released at the conclusion of their two-day meeting.

Fed Chairman Jerome Powell, at a news conference Wednesday, said officials could consider approving a smaller 0.5-percentage-point increase in December or January, but they had made no decision yet. He added, however, “The question of when to moderate the pace of increases is now much less important than the question of how high to raise rates and how long to keep monetary policy restrictive.”

Officials are boosting interest rates at the fastest pace since the early 1980s to reduce inflation that is running near a 40-year high. They have raised rates by 0.75 point at four consecutive meetings, with the latest one taking the central bank’s benchmark federal-funds to a range between 3.75% and 4%.

If the Board of Governors recognize that it takes time for their increases to do what they project will happen, why go for such large increases? Stock prices fell following release of the interest rate hike, even though the 75 basis point increase had been widely anticipated. Had the Fed increased the rate by only 50 basis points, stocks would almost certainly have risen, which would lift the value of the retirement accounts for most people. As it is, the Fed made retirees and those close to retirement age poorer, at least on paper.

Thirty-year fixed mortgage rates topped 7% last week, as Freddie Mac reported the average was 7.08%, rising from 6.94% the previous week. The last time rates were above 7.00% was in April of 2002. At this point in 2021, the average rate was 3.14%.[1]As I previously noted, we bought a house last December, which was negotiated in November, and the interest rate would have been 2.75%. However, since we weren’t going to be living in the house … Continue reading So, while the increase in home prices has moderated, the cost of buying a house is increasing due to the interest rate hikes.

The Fed wants to rein in inflation, but do so without causing a steep recession. Yet the Board of Governors keeps making 75 basis point increases — four in a row now — when they admit that they do not know exactly what the effects on the economy will be and that we won’t be able to see, or measure, them for a year.

The last time inflation was at the rates we have seen for the last year was during Jimmy Carter’s stagflation of the late 1970s into 1980. Inflation was beaten then the hard way: with a steep and painful recession in 1981-82. And that’s what will happen again, regardless of what the Fed tries to do.

References

References
↑1 As I previously noted, we bought a house last December, which was negotiated in November, and the interest rate would have been 2.75%. However, since we weren’t going to be living in the house — it’s rental property for my sister-in-law — the rate became 3.75%.
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Killadelphia: If your refuse to define the problem, then you can never find the solution!

I noted yesterday that the homicide problem in Philadelphia is not one of too few police, or even a ‘progressive’ District Attorney, but a problem of culture, in which some idiot thought that the best way to handle an argument was to just shoot the guy. Yeah, he “won” the argument, I suppose, but if he’s caught he might just spend the rest of his miserable life behind bars. The idiot who ‘settled’ his argument on Hallowe’en by shooting another man in the chest could, under Pennsylvania Title 18 §2502 be charged with Murder of the first degree, though third degree seems more probable. First degree murder is punishable by life in prison without the possibility of parole, or even a death sentence, though District Attorney Larry Krasner refuses to pursue capital sentences, while third degree murder, a first degree felony in the Keystone State, carries a sentence of ten to twenty years in prison.

So, about what were the two men arguing that is somehow worth ten to twenty years in the state penitentiary? Was the one man blocking access to the street as he was helping a lady move from the 2500 block of Carroll Street? Did the two men have a previous beef with each other?

The Philadelphia Shootings Victims Database details, in an awkward format, the people shot and killed in the City of Brotherly Love. There are times that I wonder if that awkwardness is deliberate, because you have to import the .csv file, and open it in Microsoft Excel, alter some of the column widths, and then hide data columns which are mostly meaningless. The data column for whether the victim is Latino or not is stupidly placed, and the fatality column is at the far right hand side. Someone more easily frustrated than me would have given up!

But one thing is obvious: the cultural problems which have led to the huge murder rate in Philly are not evenly spread among the residents of the city. The 2020 census as reported by The Philadelphia Inquirer shows just 38.3% of city residents as being non-Hispanic black, and in the October shootings chart above, all but one of the Latino victims listed are listed as white Latino, not black Latino. Black male Philadelphians have been the victims of shootings in 61.31% of the cases, and overall blacks have been the victims in 72.36% of shootings.

Non-Hispanic whites have been the victims in ‘only’ 5.53% of the cases in October, despite being 34.3% of the city’s population. There were no reported incidents of Asians being shot.

The shootings database reported 199 people shot in Philly in October of 2022; the same database, if you scroll farther down, shows 181 reported shooting victims for October of 2021. As we have previously noted, the number of homicides is slightly lower this year as opposed to last, but with the number of shootings being 9.94% higher in October alone, and 2.45% (2004 this year vis a vis 1954 through October in 2021) higher than 2021, I see that attempted murders — and I count every shooting as an attempted murder — have increased. The Philadelphia Police Department’s scoop-and-scoot policy of taking victims directly to the ER rather than waiting for an ambulance, even more experience in dealing with shooting victims by the hospitals’ emergency staff, and perhaps even lower shooting accuracy by the gang-bangers “cliques of young men affiliated with certain neighborhoods and families,”[1]We were reliably informed by The Philadelphia Inquirer that there are no gangs in the city, just “cliques of young men affiliated with certain neighborhoods and families,” who sometimes … Continue reading blasting away at their rivals.

The city’s elected leadership want to blame guns, as does the Inquirer and practically every other group around. But, last time I checked, guns were completely inanimate objects, and didn’t care who held them or carried them or owned them. If the problem was guns, we ought to see the shootings and killings rates closely match the demographic percentages in the city, and we should see the homicide rates in Philly fairly similar to the rates throughout Pennsylvania; we don’t.[2]As we have reported previously, Pennsylvania’s firearms control laws are pretty much uniform across the Commonwealth; state law prohibits municipalities from imposing restrictions which are … Continue reading

No one will address the real numbers, and no one will conclude that yes, this is primarily a cultural problem among the black and Hispanic communities of Philadelphia, because that would be raaaaacist.[3]The Editorial Board of The Philadelphia Inquirer managed to admit that people’s race determined how safe they feel, but had a not-so-subtle undertone that white people make places safer. I will … Continue reading I can say it because I’m retired, have no job from which I can be canceled, and no employer who can somehow be punished. But if the problem of homicides in our cities — more cities than just Philadelphia — cannot be honestly recognized for what it is, then that problem can never be addressed, never be solved.

References

References
↑1 We were reliably informed by The Philadelphia Inquirer that there are no gangs in the city, just “cliques of young men affiliated with certain neighborhoods and families,” who sometimes had “beefs” with other cliques, so we must replace the term “gang-bangers” with “cliques of young men” or “clique beefers”. District Attorney Larry Krasner and his office seem to prefer the term “rival street groups“
↑2 As we have reported previously, Pennsylvania’s firearms control laws are pretty much uniform across the Commonwealth; state law prohibits municipalities from imposing restrictions which are stricter than those provided for under state law. In 2020, there were 1,009 murders in the Keystone State, 499, or 49.45%, of which occurred in Philadelphia. According to the 2020 Census, Pennsylvania’s population was 13,002,700 while Philadelphia’s alone was 1,603,797, just 12.33% of Pennsylvania’s totals.

It got worse last year: with 562 homicides in Philly, out of 1027 total for Pennsylvania, 54.72% of all homicides in the Keystone State occurred in Philadelphia. Allegheny County, where Pittsburgh is located, was second, with 123 killings, 11.98% of the state’s total, but only 9.52% of Pennsylvania’s population.

The other 65 counties, with 78.11% of the state’s total population, had 33.30% of total murders.

↑3 The Editorial Board of The Philadelphia Inquirer managed to admit that people’s race determined how safe they feel, but had a not-so-subtle undertone that white people make places safer. I will confess to having thought that the Editorial Board were less concerned about how unsafe ‘black and brown’ Philadelphians feel than they were that white people felt too safe.
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Killadelphia: the problem is the culture!

I suppose I wrote too soon! I noted yesterday morning that Philadelphia was seeing a real and noticeable decrease in the murder rate, with ‘just’ 441 people murdered through 11:59 PM EDT on October 30th. Sadly, Hallowe’en turned out to be deadly:

3 people killed in separate Philly shootings

A 27-year-old man was fatally wounded in a triple shooting around 8:15 p.m. in North Philadelphia that left two other victims in critical condition.

by Robert Moran | Hallowe’en, October 31, 2022

Three men were killed in separate shootings Monday evening in Philadelphia, police said.

Around 8:15 p.m. in North Philadelphia, three people were shot outside on the 200 block of West Ontario Street by an unknown attacker, police said.

A 27-year-old man shot multiple times in the body was transported by medics to Temple University Hospital, where he was pronounced dead at 8:45 p.m.

A 26-year-old man shot five times in the body was taken by police to Temple and was listed in extremely critical condition.

There’s more at the original, but the number killed is not three; as both Steve Keeley of Fox 29 News and the Philadelphia Police Department report, there were four murders on Hallowe’en night, bring the total dead to 445 for the year.

We’re far enough into the year, 304 days, that four killings yesterday moves the averages just a little. From 1.4554 per day, and a projected 531.2376 as of yesterday, the City of Brotherly Love is up to 1.4638 murders per day, which works out to 534.2928 projected homicides for 2022. I’m tempted to say, big deal, so what, just three more killings, right? It’s not like anyone really seems to care!

Just before 5:45 p.m. in Southwest Philadelphia, a 47-year-old man was cleaning out a building on the 2500 block of Carroll Street when he was shot once in the chest by an unknown assailant, police said. The man, whose name was not released, was pronounced dead at the scene by medics.

NBC10 reported that the man, who lived in Darby, was working as a mover to help a woman. An argument erupted between the victim and an unidentified man before the fatal shooting.

I have to wonder: about what did someone argue with a man, not from the neighborhood, helping a lady move argue that was worth pulling a gun and killing him, and risking going to jail for the rest of his miserable life?

Kitchen in 2639 Carroll Street. Click to enlarge.

Carroll Street is not the worst neighborhood in Philly, but it’s hardly the best: a look through Google Maps shows a street of typical rowhomes, which have the look or some lower-end remodeling by one contractor sometime a couple of decades ago, fixing porch facias and second-story bay windows. SEveral of the homes show what were old porches now enclosed to create additional inside space. A rowhome at 2605 Carroll Street is listed as being a three-bedroom, one bathroom, 960 ft² home for sale for $180,000, and the photos show an interior which looks like a typical lower-priced flip: grey laminate floors, new paint and appliances throughout. Just down the street, at 2639 Carroll Street, is another rowhome being flipped, though the flipper put less money into it, for $125,000. Before the flipper got to it, the home sold for just $47,000 on July 22, 2020.

Maybe the orange kitchen cabinets aren’t helping get the place sold? 🙂

This is a cultural issue in Philadelphia. For whatever reason, the shooter felt the need, or the desire, to walk down Carroll Street while carrying a firearm. Then, for whatever reason they argued, the armed man thought it was serious enough to pull out his weapon and shoot the victim in the chest. Apparently little enough thought was given to just saying, “F(ornicate) you!” and walking away.

The Philadelphia Police Department is shorty hundreds of officers, but adding hundreds of police officers won’t solve the problem. More police officers might help in catching the bad guys who’ve already shot or killed someone, and perhaps, if ‘progressive’ District Attorney Larry Krasner could change his mind and start prosecuting criminals seriously, perhaps a few shootings and killings could be prevented by having the bad guys already locked up.

The problem is a culture, an attitude, a mindset that tells people that attempting to kill other people is a great solution to whatever problems they believe they have. The problem is an attitude that being a tough gang-banger is a real status symbol, proves your manhood, and is someone young girls want to f(ornicate). And the problem is a culture and an attitude that tells people it’s perfectly acceptable to use drugs, which creates the drug dealers who are responsible for much of the violence.

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Neocon off the deep end!

As we have previously noted, the old ‘neo-conservatives‘ turned #NeverTrumpers like Bill Kristol, Max Boot, and Jennifer Rubin have shown themselves to be very much on the political left in the United States, moved to the Democrats due to their #TrumpDerangementSyndrome.

Crime has shown up as one of the major issues in the upcoming election, so naturally Mrs Rubin has made a silly claim trying to blame Republicans for crime, due to the rather odd attack on Paul Pelosi, husband of Speaker of the House Nancy Pelosi, by a Canadian nudist hippie who somehow has morphed into an evil reich-wing extremist.

The tweet to the left is actually a screen capture; when someone like Mrs Rubin tweets something dumb — which is fairly frequently — I always assume that she might decide to delete it, but, alas! the internet is forever when there are [insert plural slang term for the anus here] like me around.

As we have reported previously, Pennsylvania’s firearms control laws are pretty much uniform across the Commonwealth; state law prohibits municipalities from imposing restrictions which are stricter than those provided for under state law. In 2020, there were 1,009 murders in the Keystone State, 499, or 49.45%, of which occurred in Philadelphia. According to the 2020 Census, Pennsylvania’s population was 13,002,700 while Philadelphia’s alone was 1,603,797, just 12.33% of Pennsylvania’s totals.

It got worse last year: with 562 homicides in Philly, out of 1027 total for Pennsylvania, 54.72% of all homicides in the Keystone State occurred in Philadelphia. Allegheny County, where Pittsburgh is located, was second, with 123 killings, 11.98% of the state’s total, but only 9.52% of Pennsylvania’s population.

The other 65 counties, with 78.11% of the state’s total population, had 33.30% of total murders.

Also see: Robert Stacy McCain: Dana Pico Schools Jen Rubin (But Trump Derangement Syndrome Is Incurable)

In 2020, Philadelphians gave 81.44% of their votes to Joe Biden. The Mayor, Jim Kenney, is a Democrat, as have been every Mayor since Harry Truman was President. The George Soros-sponsored District Attorney, let ’em loose Larry Krasner, is a Democrat, and won re-election in 2021, by a landslide. Philadelphia is by every possible measure, a heavily Democratic city.

It’s more than that. Those 65 counties other than Philadelphia and Allegheny? They gave 54.98% of their two-party votes — meaning: third party candidates excluded — to President Trump! It seems as though those evil, reich-wing Republicans whom Mrs Rubin claims are “inciting violence” are inciting it in heavily Democratic areas!

I’m far less familiar with our other murder capitals, like Baltimore (87.28% of vote in Baltimore City to Mr Biden) and St Louis (80.85% of vote in St Louis city to Mr Biden) and New Orleans (83.15% of Orleans Parish to Mr Biden) and Chicago (74.35% of vote in Cook County to Mr Biden), but it seems like most them are not exactly Republican strongholds.

It’s clear: Mrs Rubin somehow sees the assault on Mr Pelosi as somehow a far, far, far worse thing than the 441 murders in Philadelphia so far this year, or the 562 who were killed in 2021. I suppose I can only fault her partially for that, because that’s pretty much the way the Democrats as a whole see things.

 

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If a private business did its accounting the way the Fed does, in which federal prison would the business’ chief financial officer serve his sentence?

While you sometimes see decent stories on economics in The New York Times and The Washington Post, The Wall Street Journal is really the place to go.

Higher Interest Rates Fuel Losses at the Federal Reserve

The central bank is now paying out more in interest expenses than it earns in interest income

by Nick Timiraos | Hallowe’en, October 31, 2022 | 5:30 AM EDT

The Federal Reserve’s aggressive interest-rate rises to fight inflation are leading the central bank to do something it has never consistently done before: lose money.

The central bank’s operating losses have increased in recent weeks because the interest it is paying banks and money-market funds to keep money at the Fed now exceeds the income it earns on some $8.3 trillion in Treasury and mortgage-backed securities it accumulated during bond-buying stimulus programs over the past 14 years.

The paywall hits right here; aren’t you glad you have a writer shelling out his hard-earned money to subscribe for you?

Of course, that $8.3 trillion in Treasury and mortgage-backed securities it accumulated were accumulated via ‘quantitative easing,’ in which the Fed spent money it didn’t actually have, but, with no one to bounce the ‘checks’ — not that checks are written anymore; it’s all done with electronic funds transfers — the money was just ‘created.’

The losses don’t interfere with the Fed’s ability to conduct monetary policy, and they follow years in which the central bank earned profits of around $100 billion, which it sent to the U.S. Treasury. Those remittances reduced federal deficits, and as they end, the federal government could face marginally higher borrowing needs.

If the Fed runs sustained losses, it won’t have to turn to Congress, hat in hand. Instead, it will simply create an IOU on its balance sheet called a deferred asset. When the Fed runs a surplus again in future years, it would first pay off the IOU before sending surpluses to the Treasury.

And there you have it: unlike regular banks, which would have to borrow money from someone else, incur a real liability that they’d hope to be able to pay off in the future, our central bank simply creates “a deferred asset,” something that you or I or commercial banks can’t just do. If a If for some reason the Fed didn’t run a surplus again, the deferred assets would simply be deferred longer.

In accounting for real people, a deferred asset is something very different:

A deferred asset is an expenditure that is made in advance and has not yet been consumed. It arises from one of the following two situations:

  • Short Consumption Period: The expenditure is made in advance, and the item purchased is expected to be consumed within a few months. This deferred asset is recorded as a prepaid expense, so it initially appears in the balance sheet as a current asset.
  • Long Consumption Period: The expenditure is made in advance, and the item purchased is not expected to be fully consumed until a large number of reporting periods have passed. In this case, the deferred asset is more likely to be recorded as a long-term asset in the balance sheet.

In other words, a deferred asset in the real world is something completely opposite of what the Fed could do. In the real world, a deferred asset is created when an individual or business spends money it already has for something before that something is actually acquired. What the Fed would do is claim that money that it is spending that it does not have is an asset it will have in the future. A private business could take out a loan, based on anticipated future revenues, but to simply declare that the asset is there just doesn’t work.

If a private business did that, the Chief Financial Officer would go to jail.

The arrangement is akin to an institution facing a 100% tax rate and offsetting current losses with future income, said Seth Carpenter, chief global economist at Morgan Stanley.

The losses stem from some obscure monetary plumbing. The Fed’s $8.7 trillion asset portfolio is full of mostly interest-bearing assets—Treasury and mortgage securities—with an average yield of 2.3%. On the other side of the ledger—the liability side of the Fed’s balance sheet—are bank deposits held at the Fed known as reserves and overnight loans called reverse-repurchase agreements.

Before the 2008 financial crisis, the Fed kept its portfolio relatively small, at less than $1 trillion. Its main liability was the amount of currency in circulation. The Fed shifted reserves up and down in incremental amounts if it wanted to lower or raise short-term interest rates.

After the crisis, the Fed cut interest rates to zero and purchased large quantities of bonds to provide additional economic stimulus. Those purchases flooded the banking system with reserves. To maintain control over interest rates with a larger balance sheet, the Fed revamped the way it manages rates. The new system, which was already in use by many other central banks, controlled short-term rates by paying interest on bank reserves.

For the past decade, relatively low short-term interest rates meant the Fed earned more on its securities than it paid out as interest on reserves or other overnight loans. After covering its expenses, the Fed last year handed back about $107 billion to the government.

Did you understand all of that? Well, the WSJ commenters were almost all laughing at the article, with at least one CPA noting that this was the way to jail for a private corporation.

The United States gets away with this because the dollar is the world’s reserve currency, and our debts are all denominated in dollars. Five American territories and eleven independent nations use the dollar as their official currency. We can always pay our debts, because we control our own currency, and the ‘checks’ are all written on a ‘bank’ that doesn’t bounce them. But I’m old enough to remember when OPEC floated the trial balloon of requiring payment in euros rather than dollars, and the panic concern to which that led. In one way, the entire world’s economic system is being propped up by the United States Federal Reserve. But if we keep up with the acco9unting tricks, that could change.

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Killadelphia: the numbers are slightly better!

I had previously speculated that it was possible that the City of Brotherly Love would have fewer homicides this year than last. The reason was simple: at the end of the Labor Day holiday weekend in 2021, the city was on a path fort 532 homicides, but then saw a huge spike in the rate of killings, and finished the year with 562 people pouring out their life’s blood in the city’s mean streets.

It’s Hallowe’en, almost two months past the Labor Day weekend, almost half of the way to the end of the year, and city homicides have fallen by 3.71%. At the current rate of murders, 1.4554 per day, Philly is on a pace for 531.2376 homicides, a horrible number, easily second-place all time, but still 31 fewer people killed than last year.

But if the numbers have improved slightly over last year, the city has still already reached 6th place on the all-time list, with 62 days left in the year. It should only be a few more days until Mayor Jim Kenney, District Attorney Larry Krasner, and Police Commissioner Danielle Outlaw top the high under former Mayor Frank Rizzo, and get into Mayor Wilson Goode — he of the MOVE bombing fame — territory. Given that Philly’s top three still have another year in office together, they could actually hold first, second, and third place, gold, silver, and bronze, when Mr Kenney, and I have to presume, Commissioner Outlaw, leave office at the end of 2024.