Good Friday Morning! In exciting personal news, I’ve launched a podcast! “The Beltway Outsiders Podcast with Daniel Vaughan.” I’m still waiting for approval to go up on Apple’s Podcasts directory, but if you want to listen now, you can check out my page on LaunchPad. They’re run by the PodcastOne network, who hosts shows like The Federalist Radio Hour and Adam Carolla. Right now, the plan is to do a weekly podcast with plans to scale up in the future. I’ve never done anything like this before, but when I started writing via this site, I didn’t know I’d begin growing an audience via a newsletter.
So far, the learning curve has been intense but enjoyable. And I’m working to improve every episode. Once I get approved for Apple, I’ll work on getting on other services like Sticher and Spotify. If you have ideas, questions, or ideas for the podcast, hit me up at Daniel.Vaughan@thebeltwayoutsiders.com. I’ll probably start up a mailbag session at some point, so if you have something you’d like to throw in there, feel free to send it my way.
This week I’m covering an extremely odd op/ed in Bloomberg written by a former Federal Reserve official calling for the FED to use its power to help remove Donald Trump from office in 2020. Links to follow.
One quick hit:
The Wall Street Journal ran a piece, and other outlets have reported similarly: “Research Finds Genetic Links to Same-Sex Behavior: A broad study found five genetic markers, but experts caution that environmental factors also play a role.” Here’s the problem with that assertion, and this comes from the journalist who wrote it:
Taking into account the entire contribution of genetic markers that may play a role, the researchers estimated that genetic variation could account for up to 8% to 25% of same-sex sexual behavior in the population studied. But when the researchers pooled all of the identified markers to create a score for an individual person, the genetic variation explained less than 1%, making it practically impossible to predict a person’s sexual orientation or behavior based on his or her genome.
“It does solidify the fact that genes matter,” said Michael Bailey, a psychology professor at Northwestern University who wasn’t involved in the work. “But it also provides more support for something that we all knew, pretty much—that genes can’t be close to the entire story.”
In other words, that story doesn’t say anything close to what the headlines say. Science reporting continues to be really bad.
Where you can find me this week
Podcast home on LaunchPad — more coming soon!
Gene editing is a powerful tool – and we need rules – Conservative Institute
NPR reported a story that researchers are trying to use gene-editing technology to edit the DNA of sperm. This use of CRISPR is a shift from past research because it seeks to alter DNA and then pass those edits down to future generations. It’s something we need to start talking about as a society.
The new left has replaced Marxist class consciousness with identity politics – Conservative Institute
Two people it’s interesting to compare are Bernie Sanders and Alexandra Ocasio-Cortez. They’re both self-described democratic-socialists, but how they approach their socialism is different. Bernie is closer to an old-school Marxist communist, whereas AOC is altering that Marxist conception of the world with a modern identity politics twist.
The Federal Reserve is now… the Deep State?
Bill Dudley wrote a column for Bloomberg Opinion calling for the Federal Reserve to use its power to influence the 2020 election. This column made waves because Dudley is, among other things, former president of the Federal Reserve Bank of New York from 2009 to 2018, and as vice chairman of the Federal Open Market Committee. He’s the definition of establishment financial world.
The column, entitled “The Fed Shouldn’t Enable Donald Trump: The central bank should refuse to play along with an economic disaster in the making,” starts by describing the role of Federal Reserve in cushioning the US economy when it gets hit by adverse conditions. The Fed uses its power to remove the sting of recessions and try to bring the US out of those times. Dudley says this policy accommodates the President, and the Fed shouldn’t do that:
So, according to conventional wisdom, if Trump’s trade war with China hurts the U.S. economic outlook, the Fed should respond by adjusting monetary policy accordingly — in this case by cutting interest rates. But what if the Fed’s accommodation encourages the president to escalate the trade war further, increasing the risk of a recession? The central bank’s efforts to cushion the blow might not be merely ineffectual. They might actually make things worse.
Fed Chairman Jerome Powell has hinted that he is aware of the problem. At the central bank’s annual conference in Jackson Hole last week, he noted that monetary policy cannot “provide a settled rulebook for international trade.” I see this as a veiled reference to the trade war, and a warning that the Fed’s tools are not well suited to mitigate the damage.
Yet the Fed could go much further. Officials could state explicitly that the central bank won’t bail out an administration that keeps making bad choices on trade policy, making it abundantly clear that Trump will own the consequences of his actions.
Such a harder line could benefit the Fed and the economy in three ways. First, it would discourage further escalation of the trade war, by increasing the costs to the Trump administration. Second, it would reassert the Fed’s independence by distancing it from the administration’s policies. Third, it would conserve much-needed ammunition, allowing the Fed to avoid further interest-rate cuts at a time when rates are already very low by historical standards.
I understand and support Fed officials’ desire to remain apolitical. But Trump’s ongoing attacks on Powell and on the institution have made that untenable. Central bank officials face a choice: enable the Trump administration to continue down a disastrous path of trade war escalation, or send a clear signal that if the administration does so, the president, not the Fed, will bear the risks — including the risk of losing the next election.
Dudley’s point here is that the US-China trade war, spurred on by Trump, is pushing the economy towards a recession. Instead of trying to prevent a recession through accommodative policy, that cushions the trade war’s blows as much as possible, Dudley is arguing the Federal Reserve should push back against the President.
Now, on the one hand, you could argue that this is just taking a different policy position by the Federal Reserve, and it isn’t overtly political. There are kind and unkind ways of reading that sort of thinking. But that’s not all Dudley said…
He also wrote the kicker, the ending paragraph that went around the world:
There’s even an argument that the election itself falls within the Fed’s purview. After all, Trump’s reelection arguably presents a threat to the U.S. and global economy, to the Fed’s independence and its ability to achieve its employment and inflation objectives. If the goal of monetary policy is to achieve the best long-term economic outcome, then Fed officials should consider how their decisions will affect the political outcome in 2020.
Here, Dudley is saying that the Federal Reserve should adjust its policy to impact the outcome of the 2020 election. This power-grab is the definition of banana republic politics — a former government official demanding that state bureaucrats step in and influence an election.
I cannot emphasize enough how insane this is as an actual suggestion.
Trump and his defenders have called a bunch of people in the federal government deep state actors trying to bring down a duly elected President. Almost all of those claims are fever-dream conspiracy theories masquerading as reality. But this — THIS — is a former Federal Reserve official saying that the nation’s economists and bankers must defeat Donald Trump.
Ben Hunt, an investor, and financial writer over at Epsilon Theory compared the entire episode to the Leeroy Jenkins viral video, and made these points:
In 2005, a home video of a group of World of Warcraft players went ‘viral’, as the kids would say. While one of their members – the aforementioned Leeroy Jenkins – is in the kitchen making a plate of food, the rest of the group engages in an exhaustive planning session for making an assault on a near-impregnable fortress of evil monsters. They solidify the plan and are confident in its success, but Jenkins walks back from the kitchen and – without any consultation with his partners – attacks the evil fortress head-on and berzerker style, yelling out his battle cry, “LEEEEEROY JENKINS!!!”.
The entire party is slaughtered by the horde of evil monsters that Jenkins triggers.
And that’s going to be the outcome here, too.
Because now when Trump tweets that the Fed is his political enemy … it’s no longer a joke.
Because now if the Fed does NOT cut 50 bps in the September meeting, they will face a withering political attack … and they will lose that fight.
Because Bill Dudley just widened the widening gyre by a country mile.
Within six years, regardless of who is elected in 2020, the Fed as we know it will no longer exist.
It will be explicitly brought within Executive control, no different than, say, the Department of Homeland Security.
I’m not saying that’s a good thing and I’m not saying that’s a bad thing. I’m saying that’s what I think will be.
And the evolution of capital markets into a political utility will be complete.
I tend to agree with Ben here — and I also think he’s right on his analysis of China. But back to this point, what Dudley has done here is the greatest thing ever for Trump. The Federal Reserve is over a barrel now, and Trump can demand they lower interest rates to keep credit cheap and easy money sloshing throughout the market. If they don’t do it, they’re following Dudley’s advice, if they do follow through, they know they’re endangering the market with low-interest rates long term. Companies will continue to leverage up with more cheap debt.
I tend to think the Fed will go along with Trump here, but Dudley has almost guaranteed the Federal Reserve will lose power. Democrats are going to jump into this fray too because if the Fed does ease interest rates, they’ll take the Dudley path and accuse the Fed of being sycophants to Trump. I don’t believe the Federal Reserve was ever independent in any meaningful way — but whatever remaining credibility their so-called independence just got nuked by one of their own former members.
And whatever path they take, Trump gets his deep state narrative confirmed. He also gets it from the news that former FBI director James Comey broke the rules in trying to expose Trump, from the Associated Press:
The watchdog office said Comey broke bureau rules by giving one memo containing unclassified information to a friend with instructions to share the contents with a reporter. Comey also failed to return his memos to the FBI after he was dismissed in May 2017, retaining copies of some of them in a safe at home, and shared them with his personal lawyers without permission from the FBI, the report said.
“By not safeguarding sensitive information obtained during the course of his FBI employment, and by using it to create public pressure for official action, Comey set a dangerous example for the over 35,000 current FBI employees — and the many thousands more former FBI employees — who similarly have access to or knowledge of non-public information,” the report said.
Jonah Goldberg argued in his syndicated column this week that the reason Trump’s attacks have been so scattered and bizarre is that he’s searching for a new foil. In the 2016 election, the foil was Clinton. For the last three years, it’s been Mueller. But now the Russia investigation and Mueller are gone, and Trump needs a new foil, a new heel for his reality TV show mindset. He’s tested out the Squad, Federal Reserve Chair Jerome Powell, and others. I don’t think the Fed is a good foil long term, but Dudley sure did everything he could to confirm the existence of that foil for Trump.
Trump has this knack for getting ordinary people to do things that they otherwise wouldn’t do. Comey, Dudley, and Powell are all stereotypical technocratic bureaucrats. What Trump does is reveal that they’re all wildly influenced by their perceived self-worth and importance. They take actions to defend what they believe is theirs when what they’re supposed to do is serve the system.
I’d liken it to Gondor in the Lord of the Rings books. The line of kings had left the kingdom, and protection of the empire fell to the stewards. But when the kings returned, the stewards rejected them and tried to retain power. Technocrats of the federal government have a similarly inflated view of their own importance.
It’s not so much a deep state coup in the federal government as it is a bunch of technocrats with inflated egos trying to “protect the system.” Their actions, however, are doing more to destroy the system they claim to love than anything Trump has done. They should have taken a page from Robert Mueller, who did his job, ignored all the media and clamoring, and then left the scene. He did what an actual public servant would do and rejected the media/political circus. Because of that, the Russia probe has a definitive ending.
I don’t know what 2020 will bring, who will win and lose, and what will happen. But what I do know is this: if the Federal Reserve interferes with the 2020 election, it will shake the legitimacy of the federal government to its foundation. Elites who have worked in these institutions do not seem to realize what they’re requesting and the turmoil that would ensue if they got what they wanted. I don’t know what it would take to trigger a second Civil War, but technocrats and bureaucrats trying to sway the election to one party is undoubtedly one option.
Links of the week
About This Whole Loyalty Business…: A reflection on the discourse. – John Podhoretz, Commentary Magazine
What Went Wrong with Silicon Valley? – Jim Geraghty, National Review
Engineered Mini Brain Models Show Patterns of Activity That Resemble Babies’: The findings raise hope the technology could be harnessed to study normal brain development, but ethical concerns remain – Daniela Hernandez, The Wall Street Journal
Negative Rates Actually Cut Lending, Research Shows – Eddie Spence, Bloomberg
Trump’s primary challenge mirage – Kristen Soltis Anderson, The Washington Examiner
Yes, you can still visit Bob Dole’s 1996 campaign website. Here is its story. – Matt Binder, Mashable
Ilhan Omar stole my husband, DC mom claims in divorce papers – Julia Marsh, The New York Post
Elizabeth Warren supporters believe she can win as doubts persist in the Rust Belt – David M. Drucker, The Washington Examiner
More Republican women than ever are planning to run for office: A record number of women hold seats in Congress, but they are mostly Democrats. Now, new contenders are hoping to shift the imbalance in D.C. and beyond. – Sarah Fitzpatrick, Kristen Welker, and Kenzi Abou-Sabe – NBC News
The Times turns against the crowd. – Noah Rothman, Commentary Magazine
Did Trump’s 2016 Rallies Trigger a 226% Increase in Local Hate Crimes? Not Exactly. The study at the source of the viral headline was limited to counting anti-Semitic incidents, many of which were not criminal in nature. – Robby Soave, Reason Magazine
Twitter Thread(s) of the week
Satire piece of the week
The Babylon Bee has been on fire this week with their coverage of the chicken sandwich wars between Popeyes and Chick-fil-A. The headlines have had me rolling:
But the satirical piece that made me laugh the most was in honor of the new Dave Chappelle stand-up special, which is causing progressives to go insane because Chappelle mocks them relentlessly in his special. Chappelle is building himself into a modern-day George Carlin.
U.S. — After some confusion was expressed by casual observers of apparent hypocrisy in their denunciation of Dave Chappelle’s most recent comedy special, liberals from around the country clarified that they only want black voices to be heard when those voices are saying liberal-approved things.
The offended white progressives asked black comedian Dave Chappelle to “keep it down” and “maybe not talk so much” after his comments made them feel uncomfortable, sources confirmed Thursday.
“Yeah, we’re glad you’re a minority and we’re happy that your black voice is being heard,” said Zender Mollison, 32, Portland, he/him, in an open letter to Chappelle. “But you’re not saying the right things.” Mollison then offered to send Chappelle a list of the things that are OK for black people to say, such as that white people are evil, that everyone should be canceled for literally anything they tweeted a decade ago, and that Donald Trump is Hitler.
Thanks for reading!