The independence of the central bank

The administration of President Donald Trump has made many of us eager to cheer on virtually any check or balance as it appears, even as we were briefly cheering on the old neoconservatives of and around the Cheney family (yes, the old torture caucus), insofar as it limited Trump's reach. It served a human and humane purpose.

Anyway, the issue of the independence of the Federal Reserve, America's central bank (the third central bank in the history of our country) has come to the fore of late.

The political hack's instinct is often to advance the cause of inflation, in part because it assists net debtors in relieving them of some of the net value of their indebtedness, and that can have stimulative effects in the marketplace and at the ballot box. Also, if the nation-state itself is a debtor, as the United States certainly is on a world history record-breaking scale, then reducing the value of the currency on which its bonds were issued is a way of getting the benefit of a partial default without actually defaulting.

But somebody has to be in a position to, and has to be willing to, resist this impulse. That is the lesson of Weimar -- the lesson of Zimbabwe -- the lesson of other times and places where the hack impulse went unresisted.

The US Supreme Court just heard arguments on whether Trump can summarily fire a Fed member, Lisa Cook. My understanding is that the arguments did not go well for the administration. We can only hope that the court follows through on what appears to be its inclination.

From a more philosophical Big Picture point of view, one has to ask: what about gold? The amount of gold on and inside the planet is fixed. Nobody is ever going to be able to increase it. We're not expecting any gold laden comets. A nation with a gold standard doesn't have these temptations, and doesn't have to deal with the nuisances of a central bank either.

Still: this is the world timeline we're in. We haven't had a gold standard of any sort since the early 1970s, and that one was limited in contrast to the pre-New-Deal version. We do have a central bank and at the moment it is worth rallying around Powell. Under attack himself (for the same reasons as Lisa Cook although with different pretexts) he has raised a standard to which the honest may repair.

And to the best of my knowledge he has never advocated "enhanced interrogation" of prisoners of war.

Searle: The Chinese Room

John Searle has become the object of accusations of improper conduct. These accusations even have some people in the world of academic philosophy saying that instructors in that world should try to avoid teaching Searle's views. That is an odd contention, and has given rise to heated exchanges in certain corners of the blogosphere. At Leiter Reports, I encountered a comment from someone describing himself as "grad student drop out." GSDO said: " This is a side question (and not at all an attempt to answer the question BL posed): How important is John Searle's work? Are people still working on speech act theory or is that just another dead end in the history of 20th century philosophy? My impression is that his reputation is somewhat inflated from all of his speaking engagements and NYRoB reviews. The Chinese room argument is a classic, but is there much more to his work than that?" I took it upon myself to answer that on LR. But here I'll tak...

A Story About Coleridge

This is a quote from a memoir by Dorothy Wordsworth, reflecting on a trip she took with two famous poets, her brother, William Wordsworth, and their similarly gifted companion, Samuel Taylor Coleridge. We sat upon a bench, placed for the sake of one of these views, whence we looked down upon the waterfall, and over the open country ... A lady and gentleman, more expeditious tourists than ourselves, came to the spot; they left us at the seat, and we found them again at another station above the Falls. Coleridge, who is always good-natured enough to enter into conversation with anybody whom he meets in his way, began to talk with the gentleman, who observed that it was a majestic waterfall. Coleridge was delighted with the accuracy of the epithet, particularly as he had been settling in his own mind the precise meaning of the words grand, majestic, sublime, etc., and had discussed the subject with William at some length the day before. “Yes, sir,” says Coleridge, “it is a maj...

Five Lessons from the Allegory of the Cave

Please correct me if there are others. But it seems to be there are five lessons the reader is meant to draw from the story about the cave. First, Plato is working to devalue what we would call empiricism. He is saying that keeping track of the shadows on the cave wall, trying to make sense of what you see there, will NOT get you to wisdom. Second, Plato is contending that reality comes in levels. The shadows on the wall are illusions. The solid objects being passed around behind my back are more real than their shadows are. BUT … the world outside the the cave is more real than that — and the sun by which that world is illuminated is the top of the hierarchy. So there isn’t a binary choice of real/unreal. There are levels. Third, he equates realness with knowability. I only have opinions about the shadows. Could I turn around, I could have at least the glimmerings of knowledge. Could I get outside the cave, I would really Know. Fourth, the parable a...

Jamesian Philosophy Refreshed

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