I wanted to try something new for myself and for my readers. Those long, highly researched posts such as the one on the Fed’s mission are taxing, and I have a couple in the hopper. But, there are a lot of things on my mind, so I thought I would try this new format, for the benefit of my readers as well. Incidentally, I heard the British group, the Easybeats in 1967 while I was at the University of York and their song was a hit then.
Mortgages and the Fed
My lengthy post about the Fed’s mission covered a lot of ground, including the Great Mortgage Crisis. A short follow-up spoke about a half-baked idea from President Trump’s advisers to do an initial public offering of Fannie Mae and Freddie Mac. Now, economist John Cochrane whom I follow, has a post in The Grumpy Economist Substack, which is worth reading and related to mine.
He notes that the GSEs are a bigger factor than ever in the mortgage market, accounting for 85% of new mortgages versus 45% before the financial crisis, and the portfolio amounts to $7.5 trillion. Innovation in the mortgage industry is being stifled by the domination of GSE’s which carry an implicit guarantee that their enterprise is Too Big To Fail. I would concur that the 30 year, low down payment mortgage which is a staple of our market should be done away with. According the June 5th H.4.1 release from the Federal Reserve Bank, it owns $6.4 trillion in securities held outright, of which $4.2 trillion are Treasury securities, and $2.2 trillion are Mortgage Backed securities.
It is nice to have a prominent economist write on Real Clear Econ’s issues treated earlier.
Biden’s Neurological Impairment and the Constitution
The old saw goes, “Two people can’t keep a secret,” and the logic is simple, and it always seemed to hold true, until now. Millions of people, predominantly in media and politics around the world had to have known, yet the general public, prisoners to Google and their smartphones, were in the dark.
Going back to the Obama administration, it then Vice President Biden’s disjointed, rambling, off-topic meditations on policy issues were brought up to President Obama; the response was something like “That’s just Joe.” Biden campaigned for the Presidency from a protected bunker. But during his presidency, the situation was exposed to politicians from the European Union, to President Zelenskiy of Ukraine who had to be reaching out to ensure that Biden would make it up the stairs to his formal entry. In the White House, when the Japanese prime minister had finished his karaoke song, President Biden couldn’t figure out how to shake his guest’s hand which contained a mike. The president’s own physician who gave him a clean bill of health for a man of his age, noting conditions like asymptomatic atrial fibrillation, sleep apnea and gait stiffness.
Chairman James Comer’s Committee on Oversight and Government Reform has taken hold of the issue of former President Biden’s mental acuity as evidenced in actions like some of his final legislative actions and extremely odd final executive pardons. His staff were putting out meaningless puffery such as “sharp as a tack,” “He’s on top of his game.”
The constitutional issues are, in my opinion, paramount when the issue is the fitness of the Chief Executive and Commander-in-Chief to carry out his duties. Within the Cabinet, the Vice President, Attorney General, the Secretaries of State and Defense, amd Secretary of the Treasury should each or as groups asserted that there was a serious constitutional issue that had to be explored and reported on to the American public.
Elon Musk and Falling Out With President Trump
Elon Musk is the closest model America has to a modern Thomas Edison. Tesla developed and mass produced the first battery operated electric vehicle, ahead of the copycat Chinese makers and other failed ventures. SpaceX is a stunning achievement, and were it not for his rocket rescue, our astronauts would still be stranded on the Space Station. The election 2024 signaled an exhaustion with the empty promises of usual progressive hymn book and its weak ticket. Without Musk’s $300 million plus in fundraising, Republican tickets would not have fared as well.
Musk and his team clearly found that the trillions which flow out through the Federal budget into government agencies and nonprofits represent unconscionable waste that he could identify and clear away with clicks of the keyboard, but really no politicians on either side of the aisle want visibility into our profligate government spending. His mission was doomed.
President Trump’s first administration had similar characteristics to his second. Dr. Ben Carson, Sr., M.D. was a pioneering pediatric neurosurgeon at Johns Hopkins Hospital until his retirement in 2013. Instead of being named Surgeon General, he was named Secretary of Housing and Urban Development. This made no sense at the time, as does much of cabinet chaos now.
The Art of the Deal doesn’t work as a metaphor for trade or foreign policy. Yes, our labor force was cored out over time by insane economic paradigms and the lure of cheap things from China, but what we have now will just feed the anti-Trump media intifada and exhaust the electorate.
Anti Semitism and Corruption in Higher Education
Larry Arnn, President of Hillsdale College has overseen the continued growth and flourishing of the relatively small liberal arts college in Michigan, which takes no Federal money and hence is free from accepting the labyrinthian Code of Federal Regulation which is constantly expanding and changing. Dealing with Federal regulation costs money, which ultimately gets passed onto student tuition.
Ivy League universities, like my alma mater Columbia, and Harvard receive hundreds of millions of dollars in Federal research and general grants each year. In addition, these schools have multi-billion dollar endowments which are professionally managed and feature assets like private equity, which can boost their results.
Columbia, after discharging its clearly under qualified President Shafik, has had a series of interim Presidents with nice resumes but couldn’t articulate the university’s core mission, nor could they effectively deal with the outbreak of anti-semitic violence and suppression of speakers on campus.
The Federal government has just written checks over the years without really investigating what the universities did with the money and whether or not they imposed punishments (suspension, expulsion, civil or criminal prosecution) for violent conduct on campus, such as breaking into buildings with glass cutters and disabling alarms to let in outsiders. There’s been nothing but hot air from my alma mater.
That ends this first Friday On My Mind experiment. Have a great weekend.