Archive for February, 2010

More writing!

On Thursday, Feb 18, the Federal Reserve announced that it intends to increase its Discount Rate. I found this to be interesting, because I spent the greater portion of my senior year working on the Fed Challenge, and we (as a group) determined we should increase interest rates (the Fed, however, ended up dropping them even more). However, I’m pretty sure most people don’t actually understand what this means for the economy, despite it actually having a lot of economic significance.

I noticed that a lot of people like to say they understand economic policy of the government, but have no idea about the uses of monetary policy, even though it makes up half of our economic policy. Dammit, most people don’t even know the relevance of the Federal Reserve.

And, yes, I am fully aware that I have talked about this before. If you want a real quick explanation, you can go back and read my previous blog posts about the Federal Reserve:
1)The Real Quick (and, now that I look back, poorly written) Blurb
2)A Post About Possibly Shifting More Power to Congress and Away from The Federal Reserve

But going back to the original topic, I think it’s fascinating that the Fed decided to increase the Discount Rate. It’s an action that I’ve been hoping they’d do for quite some time in an effort to move towards a normal economic system. Hopefully this is a sign that the Federal Reserve tends to put some value back into our dollar, instead of continually plummeting the interest rate to pump more money into the economy.

However, I am curious to see how soon it will be until the Federal Reserve decides to bump their Reserve Rate up. The Fed has stated that they want to keep their interest rates relatively low, so that banks can still borrow money (Congress, on the other hand, likes to pump money into the economy with no direction or goal of using it to put the economy back on track), but I’m not sure if this increase will be enough to encourage banks and investors that the economy is actually improving. I’ll be interested to see when the Federal Reserve decides to increase their Reserve Rate, because it’ll be a good gauge of how well they think our economy is coming out of the depression.

The situation is twice as interesting since Bernanke is up for reappointment by the president, and I wonder if this decision will help or hinder his reappointment. Despite him being an appointment made by Bush, Obama seems likely to reappoint Bernanke for a second term. I personally feel that Bernanke is far too fearful of making significant changes, and that the Federal Reserve dances around too much and allows the economy to grow too much (resulting in a bubble burst and a recession), but past Fed Chairmen (*cough* Alan Greenspan *cough*) have been equally terrible. Perhaps if they didn’t worry so much about being reappointed, they’d be capable of doing their job.

And yet we see the same problems in government politics. Elected (and appointed) officials are so damn terrified about not being reappointed that they do a poor job because they’re too afraid to do anything. And, as a result, the economy crumbles because politicians have to listen to American society, many of whom think that by simply making more money, we’ll be a richer country.

Perhaps if Americans could realize they’re not as smart in Economics and Policy Making as they claim to be, they’d be more willing to learn and understand, and politicians could actually do their job. It’s funny to think that politicians get voted in because they suck at policy making (as much as Americans suck at political science).

Post-writing apologizes: I realize that this has become more of a complaint about how American people don’t understand economics/political science rather than an analysis of what the Federal Reserve Discount Rate increase actually means. I’m glad the Federal Reserve Discount Rate has increased, because it’ll hopefully trick the economy into improving and jump start loaning again. But most people won’t see the relevance in it since most people, wrongly, think the government has complete control over the economy. Silly Americans.

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I know! I haven’t posted in a very long time. Things have been very busy for me. I ended up in the hospital about two weeks ago due to severe dehydration, mostly because I forgot that water is an essential part of the body! But, I do have a lot of things I want to talk about, and one of my meetings (Hall Council) was canceled, so I’ve suddenly found the time to rant a bit. I do have a lot of things I want to talk about, so hopefully I’ll be posting more, so I don’t keep forgetting to.

A week ago, my friend Bill and I decided to go to Wendy’s to pick up some baconators (yes, I can finish a baconator, but only if its a single). While we were there, we got into talking about American privileges, most of which are defined within our Bill of Rights (but we talked about other things, like American passports and such). I stated that most Americans generally undervalue their rights, while immigrants tend to cling onto them more because they may not have had them in their country of origin.

In any case, the conversation moved into several other topics (such as Final Fantasy). But, as we were talking about something totally different, the woman who sat across from us decided to stand up and face me. After overhearing our conversation, this is what she had to say (I wrote it down right after she left):

“I’m proud to be an American. I know my rights. You foreigners think they can just come in here and get all the privileges we Americans have.”

She then proceeded to say something about foreigners not understanding America and then proceeded to leave. Her husband (who didn’t say anything) hung around a little, went to the bathroom and left.

The statement itself was rather shocking, but highlights how ignorant people can be (and I’m not talking about her use of “you” and “them” in the same sentence) about their culture, privileges and political structure.

For one, she automatically assumed I was a foreigner. She did not make any contact with my friend, who was a white male, but proceeded to complain to me directly, because I was a foreigner who clearly did not understand America. For all she knows, I could have been a fifth generation Asian-American with a father who worked in county politics (which I’m not). But all of this would have been inconsequential, because I looked like a foreigner. This was more of a racial-generalization problem that I found personally aggravating because I happen not consider myself a foreigner.

My two major gripes with her statement were that:

1) She argues that foreigners take away American rights, because foreigners inherently need to be separated from the true Americans (perhaps she should look into being part of the Aryan brotherhood). Therefore, foreigners are inherently separated from the American culture and adding more foreigners takes away from the “true” American, as if there were people who were “truly American.” It makes me curious to see what she thinks about African-Americans. Are they “foreigners” or are they Americans? What about Hispanics? Or is she picking on Asians because we have small eyes?

Going further than that, it makes me wonder what she feels foreigners do deserve. Does she want to ship us all back and make America a 100% white, protestant country? What do “Americans” deserve? What does it mean to be “American” and does it have to do with race? If she wants to be really technical and go back to outdated times, many of our founding fathers wouldn’t have considered her an American, because she was a woman.

2) She clearly didn’t understand what American privileges I was talking about, because you can’t quite split up “Freedom of Speech” and other things. If another person enters a country, American does not take away another person’s freedom of speech and hand it to the new immigrant. In a monetary sense, then I suppose adding more people takes government money away from others, but she doesn’t have much of a right to talk, since I’m pretty sure she takes social security checks (and, judging from her age, Medicare) and probably gets more money from the government than a Fresh Off the Boat (FOB) 30 year old Asian man.

I wanted to ask her how much she really knew about American privileges. Does she know that 5 adults pay for every person on Social Security? Is she aware of how Social Security, Medicare and Medicaid were developed? Does she know how our welfare state is organized?

Her comment really drove home the idea that Americans undervalue and disregard our privileges as, well, privileges. Because it is so ingrained that these “privileges” are human necessities, she and others like her forget that there are countries such as China, where free speech is just about non-existent, and France, where the burka may be banned because it poses a threat to their secular state. We often take for granted our freedom to speak out against the government and practice our religion. Often, we even take for granted our freedom to work hard so we can rise in economic status (because, yes, that is a freedom that some other states do not give to their citizens). Even I know that, in many situations, I undervalue the privileges I would not have in many other countries.

While I decided not to verbally fight against her, what she said to me was both hilarious and depressing in its sheer ignorance. Although I would like to think that there are not many others like her, it’s this lack of intelligence and humility that drove me to make my comment in the first place.

I wonder if she would have thought differently had she known I was a political science major.

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