OPINION
LAWRENCE JOURNAL-WORLD LJWorld.com Saturday, March 2, 2013 Lawrence City Commission Bob Schumm, mayor 1729 St. Andrews Dr. 66047 842-6729 (H), 842-7337(W) schummfoods@gmail.com Michael Dever, vice mayor 1124 Oak Tree Drive 66049 550-4909 mdever@sunflower.com Mike Amyx 2312 Free State Lane 66047 843-3089 (H) 842-9425 (W) mikeamyx515@hotmail.com Hugh Carter, 5111 Congressional Circle, D4, 764-3362 hughcarter@sunflower.com Aron Cromwell, Cromwell Environmental, 1008 N.H., Suite 300., 66044, 749-6020 aroncromwell@gmail.com
Douglas County Commission Jim Flory, 540 N. 711 Road, Lawrence 66047; 842-0054 jimflory@sunflower.com Mike Gaughan, 304 Stetson Circle, 66049; 856-1662; mgaughan@douglas-county.com Nancy Thellman, 1547 N. 2000 Road 66046; 832-0031 nthellman@douglas-county.com
Lawrence School Board Vanessa Sanburn, president 856-1233 Ash St., 66044 vsanburn@usd497.org
Fed’s hubris is hurting U.S. economy RICHMOND, VA. — A display case in the lobby of the Federal Reserve Bank here might express humility. The case holds a 99.9 percent pure gold bar weighing 401.75 troy ounces. Minted in 1952, when the price of gold was $35 an ounce, the bar was worth about $14,000. In 1978, when this bank acquired the bar, the average price of gold was $193.40 an ounce and the bar was worth about $78,000. Today, with gold selling for around $1,600 an ounce, it is worth about $642,800. If the Federal Reserve’s primary mission is to preserve the currency as a store of value, displaying the gold bar is an almost droll declaration: “Mission unaccomplished.” Today the Fed’s second mission is to maximize employment, and Chairman Ben Bernanke construes the dual mandate as a single capacious assignment — “promoting a healthy economy.” But the Fed’s hubris ignores the fact that it anticipated neither the Great Depression that began in 1929 nor the Great Recession that began five years ago. The Fed failed to cure the former, and today’s unprecedentedly anemic recovery — approximately 3 million fewer people are working than were five years ago — has failed to cure the latter: If the workforce participation rate were as high as it was when Barack Obama was first inaugurated, the unemployment rate would be 10.8 percent. Jeffrey M. Lacker has become the Fed’s resident dissenter. As a
George Will
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georgewill@washpost.com
Fed policy, which has failed so far, can also fail by succeeding. If strong economic growth begins, interest rates will rise substantially, and the cost of debt service will cause the deficit to explode.”
voting member of the Federal Open Market Committee, Lacker, president of the regional bank here, has cast one-third of the dissents recorded during Bernanke’s seven years as chairman. Lacker, who has dissented at more than half the policy meetings where he has been a voting member, has done so in the name of institutional humility. When he told The New York Times, “We’re at the limits of our understanding of how monetary policy affects the economy,” he was too polite. We are increasingly understanding the deleterious effects — political as well as economic — of very low interest rates for a very long time.
While Lacker says “a vigorous monetary policy response can be necessary at times to prevent a contraction from becoming a deflationary spiral,” the Fed continues its vigorous pursuit of growth through cheap credit more than four years after the moment of crisis. Bernanke says “using monetary policy to try to influence the political debate on the budget would be highly inappropriate” and “it is important to keep politics out of monetary policy decisions.” But monetary decisions powerfully and predictably influence political debates. Will Rogers said, “Be thankful we’re not getting all the government we’re paying for.” Today we are not paying for all the government we are getting, and the political class benefiting from this practice should be thankful for the Fed’s low interest rate policy, which makes running deficits inexpensive. In addition to making big government cheap, this causes a flight of investors from interestpaying assets into equities — the rising stock market primarily benefits the wealthy — and commodities, rather than job-creating investments. Fed policy, which has failed so far, can also fail by succeeding. If strong economic growth begins, interest rates will rise substantially, and the cost of debt service will cause the deficit to explode. The Fed’s policy regarding the safety net it weaves beneath large — “systemically impor-
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Bob Byers, 842-8345 1707 E. 21st Ter., 66046 bbyers@usd497.org Shannon Kimball, 840-7722 257 Earhart Circle 66049 skimball@usd497.org Randy Masten, 760-5196 934 W. 21st St. 66046 rmasten@usd497.org
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Keith Diaz Moore, 856-1402 1738 Barker Ave. 66044 kdmoore@usd497.org
PUBLIC FORUM
Area legislators
Rep. Paul Davis (D-46th District) Room 359-W, State Capitol, Topeka 66612 Lawrence: 749-1942; Topeka: (785) 296-7630 paul.davis@house.ks.gov Rep. John Wilson (D-10th District) 54-S, State Capitol, Topeka 66612 Topeka: (785) 296-7652; john.wilson@house.ks.gov Sen. Marci Francisco (D-2nd District) Room 134-E, State Capitol, Topeka 66612 Lawrence: 842-6402; Topeka: (785) 296-7364 Marci.Francisco@senate.ks.gov Sen. Tom Holland (D-3rd District) Room 134-E, State Capitol, Topeka 66612 Lawrence: 865-2786; Topeka: 296-6403 Tom.Holland@senate.ks.gov Sen. Anthony Hensley (D-10th District) Room 318-E, State Capitol, Topeka 66612 Topeka: (785) 296-3245 Anthony.Hensley@senate. ks.gov
— George Will is a columnist for Washington Post Writers Group.
A gold statue of a lion had been stolen from the Hunan Restaurant, 1516 W. 23rd, and was still missing. The restaurant’s owner YEARS said that the statue, made in Hong AGO Kong of a plastic and metal comIN 1988 posite material, was about four feet tall and weighed about 250 pounds. It was one of a pair. Costing $2,500 a set, the statues could not be purchased singly, the owner said: “They’re only offered in pairs because they’re different. One is a male and one is a female. The female was taken.” A $300 cash reward and a $200 gift certificate was being offered to anyone who could provide information leading to the return of the big cat.
Mark Bradford, 766-4392 1509 Brink Court, 66047 mbradfor@usd497.org
Rep. Tom Sloan (R-45th District) Room 149-S, State Capitol, Topeka 66612 Lawrence: 841-1526; Topeka: (785) 296-7654 tom.sloan@house.ks.gov
tant” — financial institutions deemed too big to fail is called “constructive ambiguity.” Lacker believes the policy is not constructive because it is not really ambiguous. Although bailing out too-big-to-fail firms is discretionary, market participants “draw inferences for future policy from our past actions.” Ambiguity, he says, breeds expectations that the Fed will act as rescuer, and these expectations are incentives for risk-taking that can compel the Fed to act. “Constructive ambiguity,” says Lacker, “became increasingly hopeless in the face of accumulating instances of intervention.” The Fed, born in 1913, is now the largest buyer of 30-year Treasury securities. And it, not Congress, which supposedly controls the government’s purse strings, funds the $447.7 million Consumer Financial Protection Bureau, which is headed by a person not lawfully in office. (Richard Cordray was installed by Obama by a process that a court has recently ruled amounts to a spurious “recess” appointment made to vitiate the Senate’s power to advise and consent to presidential appointments.) So before blowing out the 100 candles on the Fed’s birthday cake, consider the perverse result of current Fed policy: Although money is promiscuously printed to keep interest rates low, credit is tight as money flows toward high-return assets. Such as gold.
OLD HOME TOWN
Rick Ingram, vice president 864-9819 1510 Crescent Rd. 66044 ringram@usd497.org
Rep. Barbara Ballard (D-44th District) Room 451-S, State Capitol, Topeka 66612 Lawrence: 841-0063; Topeka: (785) 296-7697 barbara.ballard@house.ks.gov
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Poor showing To the editor: This past Tuesday, residents of Lawrence were given an opportunity to let their voice be heard in the most democratic way possible: an election. I am proud to live in a city that cares enough about affording individuals an adequate and equal opportunity to vote that I not only had the opportunity to vote on Tuesday, but out of fear of inclement weather or perhaps simply personal convenience, I could vote in advance of the “official” election. In fact, though I cast my vote on Sunday, advance voting began Feb. 6, giving any registered Lawrence voter 20 days in which to complete a process that takes little more than a moment of time. Imagine my surprise, embarrassment and shame for this community when I opened my newspaper Wednesday morning to read that voter turnout was 8.6 percent. Indeed, more than 90 percent of our community’s voters simply couldn’t put forth the effort to cast a simple ballot. Imagine my surprise, embarrassment and shame for this community when I read
that in a community of 88,000 residents, that the top votegetter had received less than 3,000 total votes. All around this community I hear people speaking in fearful tones of decisions made by their government both regionally and nationally that serve to limit or flat out remove their individual liberties. But why shouldn’t they remove them, when so few of us make any use of the liberties we possess? Matthew Herbert, Lawrence
Torture issue To the editor: Waterboarding has been recognized since World War II as torture and illegal under any circumstance under common Article 3 of the Geneva Convention. Sen. John McCain, former POW and Republican nominee for president, has criticized the practice and denied its effectiveness, and noted Japanese soldiers were hung after World War II for inflicting such torture. Academy Award nominee for best picture “Zero Dark Thirty” depicts waterboard-
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From the Lawrence Daily Journal-World for March 2, 1913: “A delegation of seven Lawrence men invaded the state YEARS capitol this morning prepared AGO to show to the legislators the IN 1913 injustice of the Riddle Bill which proposes to reimpose upon the city of Lawrence the old University of Kansas debt of $100,000. .... The Riddle bill proposes to reimpose upon the city of Lawrence a debt of $100,000, the sum of a bond issued in 1883 by the city of Lawrence for the maintenance of the University of Kansas at a time when the University was in need of money. The city of Lawrence at that time voted these bonds and they were sold to the state school fund. The city of Lawrence paid interest on these bonds for a number of years. Then a bill passed by the legislature relieving the city of this debt and the city ceased to pay interest. Later an effort was made to reimpose the debt but the supreme court held that the previous action of the legislature in annulling the debt must stand. At the present session of the legislature Representative Riddle asked Attorney General John S. Dawson to draw up a bill covering this, which he did. Dawson is also said to have expressed the opinion that the city of Lawrence was still liable for the debt.” — Compiled by Sarah St. John
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ing being applied by CIA agents. Controversy around the use of torture in the movie has centered on whether waterboarding led to useful information being gleaned or not. Several members of Congress challenged the producers for portraying the technique as effective rather than concern over the legality and criminality around admitted enhanced terror being used by CIA agents. If it is illegal and doesn’t produce reliable information, why is it used at all? Ironically, only one person has been charged with a crime concerning waterboarding. Ex-CIA agent John Kriakou was recently sentenced to 30 months in prison for his part in waterboarding. His crime was exposing the use of waterboarding by CIA agents violating the Constitution and world treaties. When administrations interpret law to suit their objectives, the Legislature fails to challenge presidential powers and the judicial department turns a blind eye to the possible violation of the constitution. Whistle-blowers deserve protection, not prison.
An agreement was announced this week between Lawrence and Douglas County for the county to negotiate to provide a new ambuYEARS lance service. The county was to AGO provide all equipment for the new IN 1973 operator and was planning to buy the equipment from the present operator of the ambulance service. The city’s participation was to be limited to providing the building at 1839 Massachusetts and participating in the purchase of another ambulance, which was to be bought with matching funds from the federal government.
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