Links and Minifeatures 2008 01 22 Tuesday

Fed slashes rates

In a rare action between regularly scheduled meetings, the U.S. central bank cut the benchmark federal funds rate by three-quarters of a percentage point to 3.5 percent, its lowest level since September 2005.

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Even after the Fed's move, interest-rate futures markets showed a 74 percent chance of another half-percentage point reduction in U.S. rates next week. They also pointed to a federal funds rate of 2.25 percent by midyear.

Market falls on recession concern but Fed cut helps

The Dow was down almost 465 points at its session low, while the Nasdaq, within minutes of the opening bell, dropped to a level indicating it had crossed the threshold of what is considered a bear market -- a fall of 20 percent from its October closing high.

The Dow, which isn't broad enough to be indicative of anything about the general market, nonethess fought back to only close 130 points down.

Emergency rate cut may show the Fed panicked

I'll agree with that. Of course, the overnight rate shouldn't have been at 5.25 in the first place. Kind of like what happens when you ride the brakes too long and too hard in the biggest train you can imagine - the US economy. You've now got to feed it more power that you otherwise would have so you can get up this hill the Fed created.

The cut was "obviously triggered by a stock market fall, regardless of the statement's talk about 'increasing downside risks to growth,'" said Gabriel Stein, an economist at Lombard Street Research in London.

By moving abruptly, the Fed took the gamble of exposing the extent of its own concerns about the deterioration in financial markets, and hinting it knows of even worse news waiting in the wings.

But asking bankers, who are mostly worried about inflation, to take action that might result in higher inflation before there's an obvious emergency, is expecting a little too much.

Don't ever confuse economists with bankers. To put it on a Sesame Street level, "one of these things is not like the other."

Dang, Darn, Drat, Phooey, Rats and Consarn it!

Fred Thompson quits presidential race

He was that rare candidate that the more I found out about him, the more I liked him as a leader, and the thought processes where he reached his decisions. I haven't been able to say that about anyone since Paul Tsongas (who made the mistake of alienating the Communist America-hating wing of his party with plans to economically revitalize the country).

All isn't necessarily lost. Thompson would be a good vice presidential pick for just about anyone, especially John McCain. But while Vice President has a lot of influence if he uses it correctly, he isn't the one with the big policy decisions to make.

With him and Duncan Hunter out, my hopes are pinned to Rudy Giuliani, after which I'll hold my nose and vote for John McCain. As far as I can tell at this point, everybody else would actively work to destroy the country.

(In case you haven't figured it out from the fact that I like Rudy Giuliani and really liked Paul Tsongas, I'm not a conservative. Indeed, I'm more Libertarian than anything else in my politics.)

Dems Feel Urgency to Enact Stimulus Plan

The only thing the Democratic leadership feels an "urgent need" to do is perform a bodily function with the taxpayer's money.

Okay, that's not quite accurate. They also feel a need to quit chasing the tail chasing impeachment and all the other Inquisistion-style hearings they've been holding about the Bush administration for doing things quite a bit milder than any other administration in recent memory. They need some kind of concrete accomplishment to take to the voters in November, or the Republicans are going to be back in the majority.

"The urgency that we feel at home is now even more urgent as we see the impact of our markets on others," House Speaker Nancy Pelosi said after lawmakers of both parties met with Bush at the White House.

Cross your legs and hold it, Nancy. We'll be paying interest on that money, and it'll be dragging us down until someone finds the integrity and courage to cut spending enough to pay it back.

The president also expressed confidence but said any deal must be done right, not just fast.

Right would imply that he has decided to do the intelligent, principled thing, which in this case is nothing. This whole call for economic stimulus really isn't going to help. There are things that would help, like, say, making it easier to do business and earn a profit. But that's not on the table.

This is called, "Voting with your feet":

More Jerusalem Arabs seek Israeli citizenship

After decades of living under Israeli rule and years watching the Palestinian Authority struggling to govern, more Arabs in Jerusalem are casting their lot with Israel.

Last year, as peace talks revived the possibility of handing over parts of Jerusalem to a new Palestinian nation, the number of Arab residents applying for Israeli citizenship more than doubled.

One party can't defeat jihadism

Campaign vows of "bipartisanship" are like New Year's resolutions to eat less and exercise more: ubiquitous, well-intentioned and usually forgotten.

Yet if anything has become clear since 9/11, it's that the war against jihadist terrorism must be owned and fought by both Republicans and Democrats. The war against jihadism is a long-term struggle to defend religious freedom, civic tolerance, democratic self-governance and other core Western political values. It's a war against an enemy with a different view of the human future. And it's a war that must be fought on many fronts -- military, political, intellectual, moral and economic -- simultaneously. A war this complex can't be the project of one party alone.

Read it. With less than a year to go in George Bush's term, if we don't get both parties on board, we're doomed. And I don't mean that in the "Charlie Brown" sense of the word. I mean in the literal sense of the word.