Thoughts on the discount rate

So following the announcement that the Federal Reserve's discount window lending rate was increasing on Friday, there was a lot of speculation as to what it meant for the overall policy for the Fed going forward, whether it meant they would be raising the target Fed Funds rate, whether it meant the end was nigh, etc etc.  Just as a general disclaimer, my job has NOTHING to do with this stuff, so I only have the same information as everyone else to make opinions out of.  Actually, considering I only had 1 year of econ, I probably have less, and this will probably sound overly simple of me.  I personally have no issue with raising the discount rate, and even think that it's a good idea.  Looking at the traditional relationship between the discount rate and the Fed Funds rate, logic seems to suggest that raising the discount rate and not the target for the FF rate would encourage banks to lend to each other before turning to the discount window.  Back when I was in microeconomics (fall 2006), borrowing from the discount window carried a stigma, and I think returning to something closer to that would help push interbank lending markets back closer to normal.

Having said that, I think the larger problem does not lie within interbank markets, but in consumer and business lending.  Considering that there is a bunch of uncertainty about the regulatory future, I think banks are riding things out and regrouping now instead of looking at ways to expand and grow their assets.  If we want banks to feel comfortable lending again, the government needs to get its act together and decide what regulatory reforms it's going to push.  I'm personally against anything that makes the Fed less independent, but there might be a slight bias in there...in any case, once the regulatory environment is less of a wild card, I think banks will be more confident about their overall operations, and therefore their lending as well.

Please please please

Obama is considering making recess appointments to get around the blanket holds put on nominees for several positions, including national security appointments.  FINALLY.  Rewarding those kind of tactics with any type of respect will only make people think they're acceptable.  Next time the administration is criticized about how they handled, oh, say the Christmas attack, maybe we should look at who's holding up the appointment for the head of the TSA.

Happy Hour is for Amateurs

So I just finished a book called "Happy Hour is for Amateurs," by an anonymous author who goes by "The Philadelphia Lawyer".  I initially picked it up in what I will be referring to as the Snark Section in Borders on Broad Street as a possible gift idea because of the title and cover art, but after reading a couple chapters at a coffee shop while waiting to meet up with someone, I had to go back and buy another copy because I knew I'd be keeping the book.  The basic premise is that the book is the memoir of someone who went to law school and worked as a litigator in Philly for a decade.  It is safe to say that he did not actually enjoy being in law, but the book basically traces 10 years of wild nights, crappy work, and the reasons why he eventually left the practice.  As someone who wants to go to law school and go into law, I wouldn't say that I was completely turned off from law, but I do have a better idea of what parts about the job can suck and what things to look for.  It's also definitely an explicit book, but as long as drugs and sex don't particularly bother you, it's an entertaining read.  If you want an idea of the guy's writing style, he also keeps a blog, which actually predates the book.  It's a pretty good musing on the merits of doing a job you love as opposed to a job that pays to let you do things you love. 


Anyhow, I was entertained, so figured I'd write something up.  I'm not exactly a book critic, but eh. 

Ugh.

Political hypocrisy is one of my main pet peeves.  I can't think of something more frustrating from either major party than watching someone attack the opposing side for a practice they regularly employ.  In this case, Senator Shelby is blocking up to 70 political appointments by placing a hold on their confirmation.  Beyond the fact that any Senator can place a hold on political appointments, which I think is ridiculous, this instance is particularly egregious because it ISN'T BECAUSE OF THE QUALIFICATIONS OF THE APPOINTEES.  Shelby placed a hold due to "home state concerns", meaning that when he gets what he wants, he will let them continue.  Until he sees another way to take advantage of the system.