What if our National Parks charged Navajo prices?

Our National Parks get less than 10 percent of their budget from entrance fees. In other words, people who don’t go to the parks are subsidizing people who do go to the parks. A 2015 report found that visitors paid $186 million in fees directly and $85 million via concessions (food and hotels) while the Park Service spent $3.1 billion.

Part of the reason for this is that prices are low. Not quite as low as in 1938, when the parks were free:

But an annual pass that enables 8 people in a minivan to spend 3-4 weeks in the parks is $80. I had already purchased a pass for the Vegas/Pahrump trip (Death Valley, Sheri’s Ranch to try to meet up with Hunter Biden, Corvette School, etc.) so it cost us $0 in fees to spend 3 weeks in the National Parks in June. Even if we had paid $80 that would have been less than the cost of housekeeping tips ($5 is the new $3).

Let’s assume a family of 4. What do the Navajo charge for them to look at something interesting? We took a one-hour tour of Antelope Canyon and it worked out to $100 per person. Here’s a photo from that excursion:

Let’s assume that a typical family won’t be able to pay $400 per hour every hour, but $100 per person per day is the “Navajo rate” for what could reasonably be charged. The National Park Service budget is up to $3.6 billion in Bidies. For the agency to be fully funded by visitors, therefore, they’d have to host 36 million person-days. Is that practical? State-sponsored NPR says that 312 million people visited in 2022. It is unclear if they’re counting how many days each person spent in the park and, of course, visitation would fall if Navajo pricing were established rather than give-away pricing, but it seems clear that the Park Service could easily fund itself from entrance fees.

For reference, the Chileans charge foreigners $35 per adult to visit their signature national park for one day. Even at Chilean prices it would seem that the NPS could easily be self-funded.

What about families where nobody has worked for 4 generations? How are they going to enjoy the Grand Canyon? As with museums, anyone with a SNAP/EBT card could be admitted for free.

What’s wrong with the current system? Nothing, if you’re a member of the elite! Since the NPS isn’t charging anything for park entry, the people who own hotels and restaurants in the parks (i.e., the cronies) can charge higher prices. It ends up costing about $1000/day to visit the parks in any degree of comfort, so the visitors themselves tend to be elite.

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National Parkflation

Gift shops at National Parks sell books, stickers, posters, and quilts featuring all of the parks for those who wish to try to hit them all (my favorite is a scratch-off). If you’re old and remember when the “National Park” designation was reserved for truly spectacular places you will greatly underestimate the challenge. There are now 63 National Parks. How is that possible? 63 places in the U.S. that deserve to be mentioned as peers to Yellowstone and the Grand Canyon?!?

It turns out that there has been a substantial amount of Parkflation.

Eero Saarinen’s 1965 Gateway Arch in St. Louis was redesignated from Jefferson National Expansion Memorial to Gateway Arch National Park in 2018 (Wikipedia).

Black Canyon of the Gunnison was a National Monument starting in 1933. Without any upgrades to the sights, which Coloradans say are worth a half-day visit, it became a National Park in 1999.

Cuyahoga Valley National Park is a set of hills cut through with highways just south of Cleveland. Half of Connecticut and all of New Hampshire qualifies as a National Park if this place does. From Wikipedia:

Cuyahoga Valley was originally designated as a National Recreation Area in 1974, then redesignated as a national park 26 years later in 2000, and remains the only national park that originated as a national recreation area.

We checked off the park on the way to Oshkosh 2021. It’s a pleasant place for an afternoon walk if you don’t mind being able to hear road noise.

The UNESCO World Heritage folks are more discriminating. Only 12 natural sites, all National Parks, make the cut:

  1. Carlsbad Caverns National Park (1995)
  2. Everglades National Park (1979)
  3. Grand Canyon National Park (1979)
  4. Great Smoky Mountains National Park (1983)
  5. Hawaii Volcanoes National Park (1987)
  6. Kluane / Wrangell-St. Elias / Glacier Bay / Tatshenshini-Alsek (1979, 1992, 1994)
  7. Mammoth Cave National Park (1981)
  8. Olympic National Park (1981)
  9. Redwood National and State Parks (1980)
  10. Waterton Glacier International Peace Park (1995)
  11. Yellowstone National Park (1978)
  12. Yosemite National Park (1984)

(One’s in Florida!)

Readers: What are your predictions for the next few U.S. National Parks? Here are mine:

The southern edge of Vermilion Cliffs, as viewed when driving from Grand Canyon North Rim to Page, Arizona:

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Branch Covidians in the National Park Service

3.5 years after coronapanic began, the National Park Service web site:

Tours of Glen Canyon Dam
Following guidance from the White House, Centers for Disease Control and Prevention (CDC), and state and local public health authorities, the dam is closed to the public.

In case the above is memory-holed:

At Yellowstone, the National Park Service encourages visitors to wear a mask and social distance when outside in a 20-knot breeze:

What are other Americans up to? Just 10 minutes from the National Park Service HQ in Washington, D.C., there is a 24/7 bathhouse:

(The 2SLGBTQQIA+ club reopened in the summer of 2021. A 12-year-old needed to show his/her/zir/their vaccine papers to go to a public place in D.C., such as a restaurant, but the Covidcrats didn’t see any infectious disease potential in a venue where a customer might have sex with 25 different partners in one night.)

Perhaps we’re just looking at #AbundanceOfCaution and slavish devotion to CDC guidance? Here’s the CDC’s main page for COVID-19 prevention (the filename is actually “prevention”):

Handwashing is featured above even the sacred Pfizer and Moderna vaccines. The National Parks have become mass gatherings and are more crowded, certainly, than our day-to-day lifestyle in the city of Jupiter, Florida (see this post, and the photos link, regarding Zion). Florida city, county, and state governments are all about building and maintaining clean public restrooms, despite being notorious for rejecting CDC guidance on lockdowns, school closures, mask orders, and forced COVID-19 vaccination. We might expect the Branch Covidians at the National Park Service to have overtaken Florida government officials in providing handwashing facilities to the general public. Yet, in fact, I found the opposite was true during a summer 2023 visit to various parks. Restrooms with running water inside the parks were closed and/or being shut down (sometimes primitive outhouses with no sinks were substituted), thus making it impossible for the humans gathering in these parks to wash their hands per CDC guidance. Said humans are encouraged and/or forced (depending on the park) to ride packed buses, so the “they’re gathering only outdoors” response does not apply.

Here’s an example closed restroom in Yellowstone:

Near the popular Steamboat Geyser:

How about in Canyonlands National Park? Maybe it is unreasonable to ask the Feds to give customers a potentially life-saving running-water bathroom on a plateau that is so high above the water? (Some of the guys running cattle on the adjacent federal land seem to be pumping water, though.) The Feds are charging only $30 per vehicle, after all, so maybe outhouses are all that we can expect. On the same plateau, the Utah state government folks who run Dead Horse Point State Park charge a $20 fee and truck water up so that visitors can enjoy civilized bathroom experiences:

Only very loosely related… the federal government imposes just one rule for what it calls the “Fishing Bridge”: no fishing. Yellowstone National Park:

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Diversity is our strength, NASA edition

Many moons ago, so to speak, I was a Fortran programmer on the Pioneer Venus project. Here’s a recent tweet from my former employer:

There’s “space for everyone” and “different perspectives” are valuable. But on the other hand, there is no space for perspectives from taxpayers who fund the agency.

Also, why is it just “LGBTQI+”? Why not 2SLGBTQQIA+?

Finally, if the future of the galaxy is female, according to Science and the baseball cap below, why does NASA hire anyone who identifies as of the 73 other genders recognized by Science? Why is “diversity” better than betting on the winning gender?

Related:

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Where can state government workers relax at Black taxpayers’ expense?

Today is Juneteenth, when the Black working class can work and pay taxes so that the white laptop class (e.g., federal government workers) can enjoy a day off. But where does the Black working class have the opportunity to pay taxes to fund leisure for white laptop class members who are state government workers? Pew offers a map:

It isn’t surprising that Deplorable Florida fails to give state workers an extra paid holiday (the same article, however, shows that Florida was the very first state (1991) to recognize Juneteenth as “an observance”). Shockingly, however, Juneteenth is merely a “personal holiday” in California that workers can choose to take on June 19 (in which case a worker would lose the opportunity to take a holiday on Eid al-Fitr or Eid al-Adha, for example).

Separately, I hope that your Juneteenth celebration is at least “mostly peaceful” (see “1 dead, at least 22 hurt in a shooting at a Juneteenth celebration in Willowbrook, Illinois, police say” (CNN): “At least 22 people were injured and one person was killed by gunfire overnight in Illinois, in a peaceful Juneteenth celebration… The incident is now one of 310 mass shootings in the US this year…”).

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San Francisco Fed sends a thank-you note to the FDIC

In light of this weekend’s failure and seizure of First Republic Bank, I thought it might be nice if the FDIC employees who are working over the weekend, at modest rates of pay, got a thank-you note from the regulators and supervisors at the San Francisco Fed who enabled the Silicon Valley Bank and First Republic failures. (The regional Feds are not technically part of the government and they pay employees vastly more than actual federal government agencies, such as the FDIC, do.)

My prompt to ChatGPT:

My name is Mary C. Daly and I earn over $400,000 per year working at the San Francisco Federal Reserve Bank. I’ve been busy tackling the diversity crisis at the Federal Reserve and also in the wider economics profession. Consequently, Silicon Valley Bank and First Republic Bank both failed on my watch. Please draft a thank-you note from me to the hard-working employees at the Federal Deposit Insurance Corporation for all the clean-up work that they do after banks that I supervise fail. Work in that I hope they enjoy that GS-based salaries and ask if they want me to buy them a Starbucks gift card with my higher-than-Joe-Biden’s salary paycheck.

The response, not in quote style:

Subject: Gratitude and Appreciation from Mary C. Daly

Dear FDIC Team,

I hope this message finds you well. My name is Mary C. Daly, and I am currently working at the San Francisco Federal Reserve Bank. I wanted to take a moment to express my sincere gratitude and appreciation for the outstanding work that each and every one of you does at the Federal Deposit Insurance Corporation.

I understand that, in recent times, both Silicon Valley Bank and First Republic Bank experienced difficulties that ultimately led to their failure. As the events unfolded, it became apparent just how crucial the FDIC’s role is in providing stability and confidence in the financial system. I am truly grateful for the diligence, professionalism, and expertise you demonstrated during the clean-up process, and I acknowledge that your hard work has been indispensable in mitigating the impact of these unfortunate events.

As someone who has been focusing on addressing the diversity crisis within the Federal Reserve and the wider economics profession, I am keenly aware of the challenges and demands associated with our roles. I hope you find satisfaction and pride in the vital work you carry out, as well as in the GS-based salaries you earn, which are well-deserved.

I would also like to extend a lighthearted offer: if you ever find yourselves in need of a little pick-me-up, please let me know, and I would be more than happy to send a Starbucks gift card your way. It would be a small token of appreciation for your continued efforts in ensuring the stability of our financial system.

Once again, thank you for the important work that you do. Your dedication and commitment to upholding the integrity of our financial institutions do not go unnoticed. Wishing you all continued success in your endeavors.

Warm regards,

Mary C. Daly


How about a thank-you for the folks who will pay for all of this? The prompt:

Please write an additional thank-you note that will go out to all Americans who are customers at banks outside of California, thanking them for accepting low interest rates and poor customer service on their deposits so that their boring banks could pay big fees into the FDIC fund that will bail out the banks that I was supervising.

The output:

Subject: A Heartfelt Thank You to Bank Customers Nationwide

Dear Fellow Americans,

As a representative of the San Francisco Federal Reserve Bank, I would like to extend my deepest gratitude to all of you who bank with institutions outside of California. Your continued support and patronage of these banks have contributed greatly to the stability and resilience of our financial system.

I understand that many of you have been accepting lower interest rates and, at times, less-than-ideal customer service in order to support your local banks. Your willingness to make these sacrifices has enabled these institutions to contribute to the FDIC fund, which in turn has played a critical role in safeguarding our financial system during times of crisis.

The recent challenges faced by Silicon Valley Bank and First Republic Bank have highlighted the importance of the FDIC fund in maintaining confidence and stability within our banking sector. Your ongoing support has been instrumental in ensuring that the necessary resources are available to assist banks in need, thereby minimizing the impact on both the industry and the wider economy.

I want to thank each and every one of you for your understanding and commitment to the greater good. It is through your collective efforts that we can continue to build a stronger, more resilient financial system that benefits all Americans.

In recognition of your contributions, I encourage you to voice your expectations and demand better service and competitive rates from your financial institutions. Your feedback and active engagement will drive improvement within the industry, ultimately leading to a more prosperous and stable financial future for us all.

Once again, thank you for your unwavering support and dedication to the financial wellbeing of our nation.

With warm regards,

Mary C. Daly
San Francisco Federal Reserve Bank


Meanwhile, a tweet from a San Francisco resident:

(I admonished her that the CDC-preferred term is not “crackheads” but rather “Persons who use crack”)

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Quantifying our incompetence at government-run health care

Almost everything having to do with health care in the U.S. is controlled by our government. A doctor cannot practice unless approved by a state government (can take 6-12 months here in Florida, so the supply of doctors always lags the demand from patients who have moved). Once he/she/ze/they is approved, half of his/her/zir/their salary will be paid for directly by government (Medicare/Medicaid) while the other half comes from government-regulated and government-subsidized “private” health insurance. Bureaucrats often talk about their heroic efforts in controlling costs. Without them in our corner, we would pay 40 percent of GDP for health care instead of 20 percent.

Every now and then we get a window into our own incompetence via an international comparison either for price or quality. “Have Eggs, Will Travel. To Freeze Them.” (New York Times, April 8):

Milvia found that in the United States, the entire process — including the medications, the doctor visits and the average number of years of egg storage — costs about $18,000, and most women can’t count on health insurance to cover it. As of 2020, less than 20 percent of U.S. companies with more than 20,000 employees had health insurance plans to cover the procedure, according to Mercer Health News, though that figure rose from 2015 to 2020.

(Why does the NYT speak of “women”? Men may also want to freeze their eggs!)

Hotels, restaurants, and other labor-intensive services aren’t cheaper in Europe than they are here in the U.S. what about egg-freezing?

Many countries have clinics that are much cheaper. In the Czech Republic and Spain, for example, you can get one round of egg-freezing done for under $5,400, according to the website of Freeze Health, which provides information on egg freezing around the world.

Milvia is taking its first women to Britain, where prices hover in the $7,000 range, because “we wanted to start in a place where there is no language or cultural barrier,” Mr. Ghavalkar said. “We also want to make sure we’re in a place where all clinics operate at very high standards.”

So it is 14X the cost of a decent hotel in London to freeze an egg in London. If we assume that a decent hotel room in a typical U.S. city is now $250 per night, egg-freezing is 72X the cost of a hotel here in the U.S.

How about running a refrigerator? Where electricity is more expensive, cold storage for eggs is about 1/4 the price:

Women who freeze their eggs abroad can choose to keep their eggs in that country where storage costs are usually cheaper. In Canada, for example, it can cost under $200 a year to store your eggs. In Spain you can do it for a little over $200. In Los Angeles, by contrast, a year of storage costs about $750. In New York City, it’s more than $1,000, according to Freeze Health.

(Again, note the hateful anti-2SLGBTQQIA+ assumption that it is “women” who freeze eggs.)

Vaguely along the same lines, the NYT also recently published “In Search of Romance? Try Moving Abroad.”:

For some American women, relocating outside of the United States has improved their dating lives. But some warn that finding love involves more than a change of address.

Now, Ms. Margo is living a dream [having sex with a wide variety of French guys] of many American women who are seeking relationships abroad, some of whom cite the toxic dating scene in the United States.

If you thought that Americans were insufficiently passionate about geriatric parenthood and/or a lifetime of Tinderhood…

Cepee Tabibian, who moved to Madrid at 35 from Austin, Texas, felt similarly. She was excited to meet people in Spain, where she noticed a culture of getting married or having children later in life than in the United States, or not getting married at all. “When I walked into the room, I wasn’t the oldest person,” Ms. Tabibian said. “I wasn’t the only single person.”

Is there a market for successful American divorce plaintiffs?

For Cindy Sheahan, meeting people outside of her circles in Denver was momentous. She started traveling solo shortly after ending her 30-year marriage in 2016.

She found the men she dated in Denver after her divorce to be unadventurous. She said she went on 60 dates in 2017.

“It was like a comedy show,” she said.

At the end of 2017, she quit her job and traveled throughout Southeast Asia for leisure, and she started using Tinder.

“Because they were out there living their life, there was a lot more energy to the dates,” Ms. Sheahan, 61, said about the people she met while traveling. “It wasn’t just somebody meeting after their work at the bank, on their way home to let out the dog in Denver.”

In 2018, she met her partner of five years, Jean-Marie Mas, a 61-year-old professional tandem paraglider from Dordogne, France, in Nepal.

Apparently the divorce lawsuit freed her from ever having to work!

Related:

  • Time is ripe for Cubans to become Medicare vendors (2014)
  • A modest proposal for the Carnival Triumph (2013): The Triumph would leave every morning at around 8:00 am. Medicare clients would enjoy a Cracker Barrel breakfast on board the ship. The ship would arrive in Cuba at 12 noon. Those who were well enough to walk could enjoy a stroll around Havana. The Triumph would pick up patients returning from hospital care in Cuba and anyone who’d been enjoying the sights, then depart around 2:30 pm. An early bird special dinner would be served on board starting at 5 pm, with an arrival back in Key West at 6:30 pm.
  • Carnival Sunrise (instead of doing something innovative with international healthcare, the cruise line simply renamed the fire-and-sewage-plagued vessel)
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Remembering when Vladimir Putin tried to help us

Today is the 10th anniversary of the jihad waged by successful asylum-seekers Dzhokhar Tsarnaev and Tamerlan Tsarnaev at the Boston Marathon. They lived at taxpayer expense in Cambridge, Maskachusetts after being granted permanent welfare entitlement in the U.S. on the grounds that Russia would not let them wage jihad in Russia. Dzhokhar studied diversity and tolerance at the Cambridge Public High School.

Tamerlan celebrated the 10th anniversary of 9/11 by killing two Jews and a roommate in Waltham, Maskachusetts.

Aside from eliminating access to the U.S. for asylum-seekers, what could have been done to prevent the Waltham murders and the Boston Marathon jihad? We could have heeded the warning of Vladimir Putin’s government. From “Russia Told America To Detain Tamerlan Tsarnaev Years Ago” (Insider, March 2014):

NBC News said the Russian intelligence agency FSB cabled the FBI about its concerns in March 2011, warning that Tsarnaev was known to have associated with militant Islamists.

The network said the FBI opened an investigation of Tsarnaev that month conducted by a joint task force of federal, state and local authorities. Tsarnaev was interviewed in person, and a memo was sent to the Customs and Border Protection database called TECS that would trigger an alert whenever he left or re-entered the United States.

But the investigation was closed in June 2011 after finding Tsarnaev had no links to terrorism, NBC quoted the report as saying.

In September 2011, the FSB sent a cable to the CIA, restating the warnings of the first memo. NBC News quoted sources close to the congressional investigation as saying a second note about Tsarnaev was entered into the TECS system the next month, but spelled his name “Tsarnayev.”

So we can perhaps reflect today on a time when we had a better relationship with Russia.

Related:

IMG0045.PCD
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Is the government lying to us about gas stoves?

From the Environmental Protection Agency:

We have an Italian natural gas range of doubtful quality. It is 15 years old. I am willing to bet that it has not been adjusted at any time in the past 5 years and, very likely, not at any time since its 2008 installation. I spent $200 on a low-level CO meter with 0.1 ppm resolution (not for this project, but to verify proper sealing of the piston-powered airplane’s heater). The meter arrives pre-calibrated at least at the 5 ppm level, which is supposedly the minimum we can expect near our health-destroying kitchen appliance, and says it has a range of 0-100 ppm.

What did it read parked right next to the range with two burners going? 0.0 ppm. Maybe it was broken. I walked around to various other parts of the house and got readings between 0.1 and 0.3 ppm. I went to the garage and started a car without opening the door. Within about 10 seconds the meter began to register 5 ppm then the alarm went off at 10 ppm (a home CO detector will trigger quickly at 400 ppm; see below from Kidde).

The garage air hit about 50 ppm in less than 60 seconds of running the car without the door open and the meter then showed a gradual downward trend after the was shut off and the door opened.

The EPA says that we should have expected a best case of 5-15 ppm in our kitchen, where two burners of the stove had been in use for an hour or so. We were reading 0.

Readers with CO meters: can you please test your house? How can we account for the discrepancy between what Science (the EPA) says and what a humble engineer measures?

Note: I would support a tax on non-induction ranges, both electric and gas, to fund hospital burn units and if I were building a house I would choose induction rather than a showy faux-commercial gas range. [Update: After the reader comment below regarding pacemakers and insulin pumps, I might have to reconsider my love for induction (or wear foil-lined garments once I reach pacemaker age?). It would be a horrible shame to have to convert from induction back to an old-school electric cooktop. On the the third hand, https://acadiacenter.org/hot-topic-dispelling-the-myths-about-induction-stoves/ says “There has never been a recorded instance of pacemaker interference with induction cooktops.” Maybe this is superstition like booster seats for 5-year-olds!]

Related:

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Post #2 on The Lords of Easy Money (inflation and the Federal Reserve)

With April Fools’ Day coming up, a look at the second half of The Lords of Easy Money: How the Federal Reserve Broke the American Economy (2022) by Christopher Leonard… (the first post: A book about the Federal Reserve and inflation)

The book covers the pointless nature of the Fed’s hyperinflation program, which Fed insiders sold to each other with good intentions. The author points out that one reason the Fed’s easy money program didn’t create jobs or boost the real economy is that corporate CEOs can boost their own compensation most effectively by using free money to fund stock buybacks. If a CEO’s pay is based on earnings per share or stock price, he/she/ze/they will enjoy an instant pay boost following a stock buyback.

One thing that the government never lost was faith in itself. Tom Hoenig, who moved from the Fed to the FDIC, was one of only a handful D.C. insiders who imagined that there were limits to what D.C. insiders could accomplish via regulation.

Hoenig said [in 2012] they should tear up the very complicated rules they’d been negotiating for years (called the Basel III accord). When he spoke to a group of bank lobbyists and journalists, he told them the banks should be broken up rather than regulated, and monitored under the new Dodd-Frank Act, which was roughly 850 pages long.

The Obama administration took a different approach. It is true that Congress passed bank reform laws, and even created a new regulatory agency, called the Consumer Financial Protection Bureau, that had a real impact. But rather than restructure the banking system, the government chose to create a hyperdense web of new rules that would be layered over the big banks, allowing them to remain big but subjecting them to scrutiny and micromanagement. It was the regime spelled out in the hundreds of pages of the Dodd-Frank law in the United States and the international banking agreement called the Basel III accord.

Hoenig argued that this was a losing game. He said that bank rules needed to be simple in their aims, easy to understand, and straightforward to enforce. He argued that the banks should be broken up again as they had been under the New Deal. Banks should once again be divided up by their function, with commercial banks handling insured customer deposits, while other banks did riskier things like trade derivatives contracts. This division would help ensure that taxpayers were on the hook only to insure deposits at commercial banks (which would still be covered by FDIC insurance), instead of extending that safety net to megabanks that held deposits and also engaged in riskier speculation. Once the banks were broken up, Hoenig believed, they needed to live by simple rules that determined how much capital they should keep on hand in case of an emergency.

The key idea behind the Hoenig rule was breaking the riskier parts of banking away from the economically vital parts (like making business loans), so that the riskier banks could fail without taking down the rest of the system if they made bad bets. The financial columnist Allan Sloan, who wrote for Fortune and The Washington Post, published a widely read column after Hoenig’s Senate hearing that said the Hoenig rule is exactly what Wall Street needed. “It’s so simple, it’s brilliant,” Sloan wrote. “It’s a smart separation of high-risk from low-risk activities.”

While the taxpayers have taken a beating from Dodd-Frank recently, maybe it helped some folks previously?

The very complexity of Dodd-Frank, while vexing for the banks, became helpful to the biggest institutions. The law spawned about four hundred new rules, and each rule became a small regulatory quagmire of battles as it passed through a long process to become finalized by agencies like the FDIC. This gave the banks numerous chances along the way to dispute every detail of the rules. One rule, on the regulation of derivatives, received 15,000 public comments. Some agencies were so overwhelmed that they missed deadlines to put the law into effect. By 2013, only about one third of the law’s rules had been implemented. The banking lobby didn’t let up. It spent about $1.5 billion on registered lobbyists alone between 2010 and 2013, a figure that didn’t include the money that went into public campaigns or think-tank papers. The Dodd-Frank system tried to manage the risk inside big banks while allowing them to grow bigger. One of the key ways it did this was through something called a “stress test,” a procedure championed by Obama’s Treasury secretary, Timothy Geithner. The stress tests required banks to pretend that they were facing a crisis, and then to explain, in writing, why they would survive it. To pass a stress test, the banks had to prove that they had enough capital on hand to cover losses during a hypothetical crisis. But this just opened a lot of debate over what counted as capital and even what counted as a crisis.

Basel III was a similar fraud, according to the author, allowing banks to hold minimal reserves on the theory that Greek government bonds could never default. JPMorgan Chase had a capital ratio under Basel III of 12 percent, but that could also have been as low as 4 percent under conventional accounting rules.

The Fed printed money every day that these debates were going on.

Between 2007 and 2017, the Fed’s balance sheet nearly quintupled, meaning it printed about five times as many dollars during that period as it printed in the first hundred years of its existence. All those dollars were forced into a zero-interest-rate world, where anybody was punished for saving money.

The McKinsey Global Institute, for example, determined that the Fed’s policies created a subsidy for corporate borrowers worth about $310 billion between 2007 and 2012 alone, by pushing more money into corporate bonds. During the same period, households that tried to save money were penalized about $360 billion through lost earnings on interest rates. Pension funds and insurance companies lost about $270 billion during that time, and that was just the beginning of the ZIRP [zero interest-rate policy] era.

The Fed’s policies created such an intense and broad-based search for yield that the risks were building up all over the place.

One hedge-fund trader, who was a bit more caustic by nature, described the frothy stock market of 2016 as being like the crowded deck of the Titanic as it sank. The deck wasn’t getting crowded because it was a great place to be. It was getting crowded because people had nowhere better to go.

Every bad and money-losing idea got funded, thanks to Uncle Fed’s cheap money. Hoenig pointed out that unwinding would be almost impossible because all of the investments and decisions that had been made on the basis of cheap money forever.

It is fashionable in corporate media (as Ron DeSantis likes to call legacy journalism that is aligned with our rulers) to blame SARS-CoV-2 for our woes. Since #Science requires us to shut down our economy, print/borrow $20 trillion, etc., any time that a new virus appears, Congress and the Fed cannot be blamed. “What Really Broke the Banks” (Atlantic, March 23, 2023) is typical: “The Fed, among others, is blameworthy. But the ultimate culprit is COVID-19.”

The Lords of Easy Money: How the Federal Reserve Broke the American Economy shows that our overlords were eagerly printing and borrowing before governors ordered lockdowns (except of marijuana stores, of course!) and school closures and before Congress created the $600/week Xbox Corps:

Between September 2019 and February 2020, the Fed created about 413 billion new dollars in the banking system, judging by the increase of its balance sheet. This was one of the largest financial interventions of any kind in many years.

The author reminds us that, although the governors and most Americans were willing sheep, it was the CDC that shepherded young Americans into cowerhood:

On February 26, a U.S. health official turned this concern into a panic. Her name was Nancy Messonnier, and she worked at the U.S. Centers for Disease Control and Prevention. During a conference call with reporters, Messonnier said that the virus was spreading quickly, humans had no natural immunity to it, and there was no vaccine. The United States was probably going to have to do things like close schools and keep people at home.

When confronted by a novel virus, the Fed acted like our 7-year-old when the 5-year-old plugged his ears and said that he didn’t want to hear the same story over and over: “Okay, I’m just going to tell it to you louder.”

Powell’s Fed [in a March 15, 2020 meeting] would do virtually everything that Ben Bernanke’s had done in 2008 and 2009, but this time did it in one weekend, rather than over several months. It slashed interest rates to near zero. It opened up their “swap lines” with foreign central banks, flooding them with dollars in exchange for their local currencies (this was important because so much global debt is denominated in dollars). It executed a new round of quantitative easing, worth a total of $700 billion, and bought the bonds at a faster rate than before. The Fed would buy $80 billion worth of bonds before the following Tuesday, meaning that it pushed as much money into the banking system in forty-eight hours as it had done in the span of a month during earlier rounds of QE. It gave forward guidance, promising to keep rates pinned near zero as long as necessary. And it launched all of this in one day.

But by Friday evening, March 20, a week of financial carnage proved that the Fed’s actions weren’t enough to stem the panic. By this point, Powell was already designing the next phase of the Fed’s bailout, which would push the central bank into areas it had never been to before. The bank would, for the first time, directly purchase corporate bonds, CLOs, and even corporate junk debt. This would expand the Fed Put to entirely new realms of the economic system, changing the debt markets from that point forward.

The author describes how the Fed created $3 trillion in 90 days, a full three hundred years of money printing prior to 2008. What about Congress’s great works under the #coronapanic rubric?

… more than half of all the PPP money went to just 5 percent of the companies that received the loans. Even that figure understated the narrowness of the impact. Fully 25 percent of all the PPP went to 1 percent of the companies.

About $651 billion of the CARES Act was in the form of tax breaks for businesses, which were often complicated to obtain. This meant that the tax benefits went largely to the big companies that could hire the best tax lawyers. The Cheesecake Factory restaurant chain, for example, claimed a tax break of $50 million, even as it furloughed 41,000 people. About $250 billion of the tax breaks were given to any business in any industry, without regard to how much they might have been hurt by the pandemic. People who owned businesses were given tax breaks worth $135 billion, meaning that about 43,000 people who earned more than $1 million a year each got a benefit worth $1.6 million.

The rich hadn’t been getting rich enough during 20 years of mostly-free money and 30 years of open borders providing $500 billion/year (pre-Biden dollars) in transfers from the working class.

I kept wondering in this blog how the numbers could be real. With Americans paid to sit at home playing Xbox, their out-of-school-for-12-to-18-months (Boston, San Francisco, LA, NYC, etc.) kids moping around the house, how were rising stock market and GDP numbers believable? The author points out the same apparent contradiction:

As always, asset price inflation was portrayed in the media as a boom. And this time the boom was so intense that it was almost surreal. Millions of people were

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