Wandering Eye: Dixon kicks off campaign, banks 'almost comically awash in money,' and more

Seven years ago, reality came to mortgage markets and wiped out trillions of dollars of delusional wealth. The economy crashed and governments scrambled to inject new money—real money—to replace the vanished fake money so things wouldn't get worse. Now the Federal Reserve is again faced with the prospect of too much money in the system. It wants to raise interest rates so that the economy won't "overheat" (i.e., inflation; i.e., ordinary idiots get pay raises). Always in the past, the Fed accomplished this by taking back the money it had previously put in. But this time, as The New York Times' Binyamin Applebaum explains in a must-read article, "the Fed will pay banks tens of billions of dollars not to use the trillions it paid them previously." Trillions, as in $2.6 trillion—256 times what was in the system in 2008; enough to hand $430 directly to every man, woman, and child on Planet Earth. The story, which is certainly a deliberate effort by the Fed to assuage market nerves, explains the nuts and bolts of how the Fed plans to do this. It actually features a "Mr. Potter" at the helm of the lending system, and a "Mr. Faust" (from Johns Hopkins, no less) assessing the bargain. But in passing it tells some things that people should bear in mind as economists hail the "return to normalcy" amid flat or falling real wages for two-thirds of all workers. For example: Banks borrow money at a dime and lend it at a dollar—10 times their cost. Today's extremely low interest rates mask the fact that the spread lenders make is actually unprecedentedly high. And this with "a banking system almost comically awash in money." It's hard to see how this can hold. (Edward Ericson Jr.)

 

Today, the Ferguson Commission, established by Missouri Gov. Jay Nixon following the protests over the police shooting of unarmed teenager Michael Brown, will formally release a 198-page report outlining issues and recommended solutions regarding racial inequity. Drawing from 10 months of substantial research, "Forward Through Ferguson: A Path Toward Racial Equity" proposes 189 actions to address racial inequality in education, housing, criminal justice, and other areas. The "calls to action" include the establishment of a database that can be publicly used to track police shootings, the consolidation of the metropolitan area's police departments and municipal courts, the expansion of the Supplemental Nutrition Assistance and the Women, Infant and Children food programs, and the development of a statewide plan for dealing with mass demonstrations that would, in part, allow the media to cover protests without threat of arrest. Now available digitally to the public, the report avoids dense language and features interactive tools, videos, and links. (Maura Callahan)

 

Sheila Dixon officially kicked off her campaign for mayor, days after the current one, Stephanie Rawlings-Blake, announced she would sit out the election. With the incumbent out of the picture, Dixon focused on the things she wants to take care of if elected—namely lowering the homicide rate, working with the dirt bikers to find a solution to get them off the streets, and developing a transit plan for the region. "Our city is a deep reservoir of untapped potential," she said, according to an article in The Sun. "I am running for mayor to put these ideas into action so that together we can reclaim, revive and rebuild this great city." In other local political news, Baltimore pastor Jamal Bryant says he's running for Congress. He would be attempting to take the seat currently held by Elijah Cummings, who is reportedly considering a Senate run. (Brandon Weigel)

Copyright © 2018, Baltimore City Paper, a Baltimore Sun Media Group publication | Privacy Policy
45°