Happenings Around The Net – April 9, 2015

  1. UdaipurPiketty Says EU Politics Risks Driving Greece Out of Euro – Germany and France aren’t just mistreating Greece, “they’re mistreating themselves,” Piketty said. “We need more political integration, more democratic institutions. You can’t just do it with summits of finance ministers.”
  2. Fed Officials Divided Over June Liftoff, FOMC Minutes Show – “They are data dependent, and the data has now turned in the opposite direction,” Diane Swonk, chief economist at Mesirow Financial Holdings Inc. in Chicago, said in a Bloomberg Television interview. “We now need to see catchup before the Fed actually lifts rates.”
  3. An American Daughter Returns to Vietnam – Many Westerners, particularly in the U.S., still view Vietnam through the lens of war and aren’t aware of its vibrant population that embraces all things American. It’s also home to an entrepreneurial, fast-growing and globally-integrated economy.
  4. An Emotional Audit: IRS Workers Are Miserable and Overwhelmed – More recently, the IRS has become a casualty of the budget battles between the Obama White House and House Republicans. Since the GOP won control of the chamber in 2010, the agency’s annual budget has fallen by $1.2 billion, to $10.9 billion in 2015. Meanwhile, the agency has lost 11 percent of its employees.
  5. Fed officials still refining how to raise rates – There has been concern that, in times of market stress, investors will rush into the safety of the Fed’s reverse repo facility. This is what led to the cap on the total borrowing size on any given day in the first place.
  6. The unseen downside of strength in the dollar – Let us be very clear here — a stronger currency is good for some segments of the economy, but not all universally. A strong dollar makes imported goods cheaper, and exported ones more expensive. For consumers, we can argue this is a good thing. After all, much of the U.S. economy is consumption based.
  7. Should monetary policy take into account risks to financial stability? – Let there be no mistake: In light of our recent experience, threats to financial stability must be taken extremely seriously. However, as a means of addressing those threats, monetary policy is far from ideal. First, it is a blunt tool. Because monetary policy has a broad impact on the economy and financial markets, attempts to use it to “pop” an asset price bubble, for example, would likely have many unintended side effects. Second, monetary policy can only do so much. To the extent that it is diverted to the task of reducing risks to financial stability, monetary policy is not available to help the Fed attain its near-term objectives of full employment and price stability.
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