On the road to deflation?
Desmond Lachman | The Hill 

The Federal Reserve's everything bubble 
Desmond Lachman | The Hill 

The economic self harm of autarky: Are we really talking about America making everything it needs in America?
James Pethokoukis | AEIdeas

AIER

Zingales On The Rule Of Economists
by David R. Henderson via EconLog
In the spirit of Clemenceau, Huntington (1981) claims that in a democracy, the ultimate responsibility for a country’s military strategy belongs to the civilian political leadership. If, instead, the military controls the political decisions, it is a military dictatorship. In the same way, the ultimate responsibility for a country’s economic policy should belong to the political leadership. If economists control it, it is a technocratic dictatorship.

The Federal Reserve’s everything bubble
Desmond Lachman | The Hill

 France: Ratified Law Officially Ends the West Africa CFA Franc.  On Wednesday The French Council of Ministers adopted the bill ratifying the end of the CFA franc.  The reform will affect the eight member countries of the West African Monetary Union: Benin, Burkina Faso, Côte d’Ivoire, Guinea-Bissau, Mali, Niger, Senegal and Togo.  This bill formally transforms the West African currency, which will change its name to eco.  The Central Bank of West African States will no longer have to deposit half of its foreign exchange reserves with the Bank of France.  African News North Africa Post  ​

Tracking Down Sudan's Secret Cash  by Alberto M. Fernandez  

U.S. Sanctions on Iran: Is Natural Gas Next?

The Impact of Sanctions Two Years After U.S. Withdrawal From the Nuclear Deal

Iran: U.S. Seizes Millions and Disrupts Oil Tanker to Target Quds Force.  U.S. authorities charged two Iranian men and seized $12 million in funds used to support the Quds Force of Iran’s Islamic Revolutionary Guard Corps on Thursday.  “The Iranian regime and its supporters continue to prioritize the funding of international terrorist organizations over the health and well-being of the Iranian people,” said U.S. Treasury Secretary Steven Mnuchin.  Alireza Miryousefi, spokesman for Iran’s mission to the United Nations, said the United States should be concerned in helping its own citizens, but instead focuses on bullying Iran.  AL-Monitor  The Washington Post

Strategic Fail: Partnering with Turkey to Counter Iran Would Misread the Region by Blaise Misztal

China squeezes debt repayments from virus-hit nations
Amid the psychological rubble of the Covid-19 crisis, strands of China’s ‘New Silk Roads’ have been fused into a web of debt. What was a high-risk game of loans is now threatening cash-strapped countries as they struggle to combat the deadly coronavirus outbreak. In short, the Belt and Road Initiative has gone from the jewel in Beijing’s foreign policy crown to what many see as a poison chalice during a catastrophic world event. Read More

Iran Is Airlifting Supplies to Venezuela. The Trump Administration Should Move to Block It.
​The Islamic Republic can leverage the Maduro regime's ability to access sanctioned goods as payment for its services.

​Washington Uses Sanctions and Indictments Inconsistently When Combating Malicious Cyber Activity

Conversations with E21: Edmund Phelps on the COVID-19 Response
Allison Schrager, E21

Edmund Phelps, the winner of the 2006 Nobel Prize in Economics, is Director of the Center on Capitalism and Society at Columbia University. He did and continues to do groundbreaking work on unemployment, growth, and innovation. His most recent work addresses how to restore dynamism to the economy. Read more here.

​James Robinson: The narrow corridor to liberty
James Pethokoukis | @JimPethokoukis | "Political Economy"
 
Why do some nations become free and prosperous while others don't? According to guest James Robinson, freedom and prosperity arise when a state is strong enough to secure liberty and provide public services and a society is strong enough to prevent the state from becoming despotic.

Sanctions Won't Bust Russia-Venezuela Relationship
By Sarah White, RealClearWorld: "When U.S. President Donald Trump gave the State of the Union address in early February, Juan Guaidó, who declared himself Venezuela’s acting president last year, was in the audience as an honored guest. At the same time, Russian Foreign Minister Sergei Lavrov was paying a visit to Caracas. The coinciding trips were a striking reminder that there are competing visions of Venezuela’s future."
​

U.S. Court Exposes Turkey’s Role in Iran’s and Venezuela’s Sanctions Evasion Schemes – Again

UAE Continues to Serve as Hub for Iranian Sanctions Evasion
Saeed Ghasseminejad | Senior Iran and Financial Economics Advisor

Pacific Century: The Pandemic, China, And The End Of Globalization
interview with Michael R. Auslin, John Yoo via The Pacific Century

A Beat Down On China, With Michael Auslin
interview with Michael R. Auslin via Power Line
Hoover Institution fellow Michael Auslin discusses his RealClearPoltitcs article “Beijing Fears COVID-19Is Turning Point for China, Globalization,” and he also answers some fundamental questions about whether China can become more transparent and truly liberalize in any meaningful way.

Holding The Line: Maintaining Fiscal And Monetary Policy Boundaries In The Midst Of A Crisis
quoting Kevin Warsh via Cato Institute
Not long ago, the CMFA staff and I were preparing to officially launch The Menace of Fiscal QE, my book aimed at countering efforts to have the Fed undertake or otherwise fund off-budget government spending programs.

Visualizing The 700-Year Fall Of Interest Rates
cited Paul Schmelzing via Visual Capitalist
How far can interest rates fall? Currently, many sovereign rates sit in negative territory, and there is an unprecedented $10 trillion in negative-yielding debt. This new interest rate climate has many observers wondering where the bottom truly lies.

Flattening the Curve of a Recession
Milton Ezrati, City Journal
 
What Federal Bailouts Should and Shouldn’t Do
Nicole Gelinas, Manhattan Institut

HOW SOAKING THE RICH WORKS

The Market Lover’s Argument for Fiscal Policy
Allison Schrager, E21

Economists like to say everyone is a Keynesian in a foxhole. But this will be no normal recession. It illustrates the purpose of fiscal policy. Actually, the evidence is mixed that fiscal policy is always effective at boosting demand. But that does not mean there is no role for fiscal expansion. The scope of fiscal policy is not demand management; it is about risk management, which means preserving the arsenal of fiscal and monetary expansion for when it is needed and can be the most powerful. Read more here.... ​

AMITY SHLAES
A Proven Economic Path to Recovery
America’s past crises show that a free-market policy is the best way forward.

https://www.realclearpolitics.com/articles/2020/03/12/how_to_get_the_stock_market_back.html

https://www.realclearmarkets.com/blog/2020/03/17/somewhere_up_there_john_v_lindsay_smiles_admiringly_at_an_inept_fed_486785.htm

https://www.realclearmarkets.com/blog/2020/03/17/somewhere_up_there_john_v_lindsay_smiles_admiringly_at_an_inept_fed_486785.html

GLOBAL TARP

Yielding Nothing
Allison Schrager, City Journal

The best short-term and long-term stimulus package for COVID-19
Aparna Mathur and Erin Melly | AEIdeas

Coronavirus: What the global economy is up against
Desmond Lachman | Washington Examiner
Hopefully, chastened by the recent stock market meltdown, President Trump might drop his earlier antagonism toward international cooperation and his my-way-or-the-highway approach to domestic economic policy setting. If not, prepare for more economic pain.

Josh Rogin writes: This is not a “red scare” or an argument for complete decoupling of the U.S. economy from China. This is a call for more transparency from Chinese companies and more vigilance by U.S. institutions gambling with Americans’ financial futures. China wants to see its most controversial firms embedded in U.S. indexes and pension funds because it legitimizes these companies, undermines U.S. sanctions and advances Beijing’s strategy to increase China’s leverage and influence over the United States. We can’t afford to let that happen. – Washington Post

Kristine Lee and Ashley Feng write: Beijing’s blustering is more pernicious than false advertising. After its early mismanagement of the outbreak, China is brazenly leveraging what is now a global crisis to advance its narrow aims. […]The coronavirus should be an unequivocal wakeup call for the United States and its allies to collectively oppose China’s efforts to hollow out the existing rules-based order and advance alternatives that are ultimately detrimental to the free flow of information and global public health. – The Hill 
​
Liselotte Odgaard writes: China pursues its global interests by creating situations in which other states feel that conceding to Beijing’s interests is prudent, given China’s financial and diplomatic clout. […]China addresses key regional concerns, thereby promoting a benevolent self-image. China nurtures recipient country–identified needs previously neglected by Western donors, but such developmental nurturing ultimately serves Chinese economic, environmental, and security interests. – Hudson Institute

Crisis Of The Iranian Order
Tony Badran — Hoover Institution
The “transnational”: this is how Qassem Soleimani, the former head of Iran’s Qods Force, who was killed in a January U.S. missile strike in Baghdad, is described in Hezbollah-run schools in Lebanon. Soleimani, who commanded the militias prosecuting Iran’s wars in the region and who managed the Islamic Republic’s realm from Iraq to Lebanon, met his end as the Iranian order in those two countries was under severe stress, adding to the Iranian regime’s domestic troubles as it reels under the weight of U.S. sanctions. Read More

Stop Iran funding? Hezbollah’s Financial Activities Should be Israel’s Top Priority

https://www.usip.org/publications/2020/01/colombias-imperfect-peace-could-provide-roadmap-afghanista

As Erdogan’s reliance on Russia grows, NATO hopes to win back wayward Turkey
Aykan Erdemir and Philip Kowalski — Al Arabiya
Turkish President Recep Tayyip Erdogan and Russian President Vladimir Putin met in Moscow for six hours on Thursday to negotiate a ceasefire deal that intended to end clashes in northwest Syria’s Idlib province, which resulted in the deaths of 60 Turkish soldiers since the start of February. Although the two leaders have significant differences over the future of Idlib and Syria, Erdogan’s dependence on Russia, both politically and economically, limited his ability to pivot away from the Kremlin and realign with Turkey’s traditional allies in NATO. Read More

Place, policy, and dynamism
More than ever, America needs greater dynamism at the local level. Dynamism encompasses the pace of new business formation, the flexibility of labor markets, and geographic mobility, along with how well a region can adapt to technological change and disruption. When dynamism is widespread, the benefits of entrepreneurship, growing wages, and new types of work are available to people up and down the income spectrum. When dynamism falters in cities and regions, stagnation becomes a defining characteristic.

The reports in this series are a first step looking at how to recover dynamism where it has been lost and how to preserve the fundamentals of dynamic cities going forward. The authors bring a diverse range of interests and expertise together to begin to answer key questions about the future well-being of American cities.
READ MORE

ASIA TIMES

Why Deficits Still Matter – Brian Riedl, Manhattan Institute

https://www.realclearmarkets.com/articles/2020/01/28/goldman_sachs_should_ditch_the_virtue_signaling_and_re-emphasize_long-term_greedy_104055.html

New Paper: Fiscal Theory Of Monetary Policy
by John H. Cochrane via Grumpy Economist
By "fiscal theory of monetary policy" I mean a model with standard DSGE ingredients, including inertemporal optimization and market clearing, monetary policy described by interest rate targets, price or other frictions, but closed by fiscal theory, "active" fiscal policy rather than "active" monetary policy

The ‘Stakeholder Economy’ Comes for Pensions
Allison Schrager, E21

The investment objective of a public pension fund manager is a simple one: provide the promised pension benefits while exposing the fund (and the taxpayer who is the backstop) to as little risk as possible. But in a world of stakeholder capitalism this has all gotten a little more complicated. An Australian man recently sued his pension fund for investing in non-green companies. Last week, Bruce Katz of Drexel and Colin Higgins of the Governance Project wrote that public pension funds should invest locally to boost local economies. They argue that there is a lack of transparency that leads funds to invest in private assets in America’s coastal cities even though there is arguably an ever-greater responsibility to invest in worthy local projects. Read more here....

Men without work
Aparna Mathur and Nicholas Eberstadt | AEI video

5000 Years Of Interest Rates, Part II
quoting Paul Schmelzing via Daily Reckoning
Yesterday we hauled out evidence that interest rates have gone persistently down 500 years running.

Charles Read, The Economist, in re: Secular stagnation — which goes back at least to the Fourteenth Century: rates have been falling since then, the birth of capitalism. The “real” rate of return is adjusted for inflation.  Ergo, real interest rates have been declining for seven hundred years.  . . .  Central bankers use interest rates as their main policy tool: cut to stimulate; and when the economy is growing too fast, it raises interest rates.  Interest rates at zero: the tool becomes unusable.  BofE went to 0.5%  . . . need to find other mans of control. 

Asking the Right Questions about the Past and Future of World Order by Francis J. Gavin

Ending Iran’s Fictions

Iranian Expert Abbas Milani Believes Iranian Sanctions Are Working
interview with Abbas Milani via Fox Business
Hoover Institution fellow Abbas Milani notes that President Trump's sanctions are working and even more need to be enacted.
​
Abbas Milani: The Economy Is The Iran Regime's 'Most Serious Problem'
interview with Abbas Milani via Fox Business
Hoover Institution fellow Abbas Milani discusses tensions between the US and Iran as well as civil unrest in Iran.

Richard Goldberg is a senior advisor at FDD. From 2019-2020, Richard served as the Director for Countering Iranian Weapons of Mass Destruction for the White House National Security Council.  He previously served as chief of staff for Illinois Governor Bruce Rauner and deputy chief of staff and senior foreign policy adviser to former U.S. Senator Mark Kirk of Illinois in both the U.S. House and Senate.
 
Related articles
●        https://www.reuters.com/article/us-iran-nuclear-usa-sanctions/u-s-expects-u-n-sanctions-on-iran-to-snap-back-into-place-treasury-secretary-idUSKBN1ZE1O2
●        https://www.reuters.com/article/us-iran-nuclear-factbox/how-the-iran-nuclear-deal-dispute-mechanism-works-idUSKBN1ZD1I1
●        https://www.timesofisrael.com/us-threatens-tariffs-on-europeans-unless-nuke-deal-scrapped/
●        https://www.washingtonexaminer.com/opinion/iran-tries-to-woo-europeans-by-threatening-to-kill-them
●        https://www.wsj.com/articles/nuclear-deal-collapse-would-put-european-troops-at-risk-tehran-warns-11579102811

Simon Henderson is the Baker fellow and director of the Bernstein Program on Gulf and Energy Policy at The Washington Institute, specializing in energy matters and the conservative Arab states of the Persian Gulf. A former journalist with the Financial Times, Mr. Henderson has also worked as a consultant advising corporations and governments on the Persian Gulf.
 
Related articles
●        https://thehill.com/opinion/international/478122-death-of-a-sultan-oman-matters-so-why-such-a-slow-us-response
●        https://www.timesofisrael.com/qatar-seeks-to-mediate-amid-tensions-after-us-strike-in-iraq/
●        https://www.timesofisrael.com/why-is-bahrains-israel-friendly-foreign-minister-being-given-the-boot/
●        https://www.jpost.com/Middle-East/Late-Sultan-of-Oman-vowed-to-keep-the-Strait-of-Hormuz-open-what-now-613816
●        https://thehill.com/opinion/energy-environment/474698-turkey-doubles-regions-troubles-first-in-syria-and-now-in-libya

‘Late capitalism’? Not even close
 
Michael R. Strain | Bloomberg Opinion
 
The phrase “late capitalism” suggests that capitalism is spent and exhausted. It isn’t. Far from being in the twilight of the market economy, the storm clouds from the recession have finally passed.

3 charts showing good news about American wage growth
James Pethokoukis writes that Democratic presidential candidates remain dismissive of the American economy and its record-long expansion. They fail to recognize that wages are rising, and they're rising fastest for those at the bottom.
READ MORE
 

Myths About Capitalism
by Milton Friedman via PolicyEd
One of the great myths of free

https://www.realclearmarkets.com/articles/2019/12/16/paul_volcker_as_inflation_slayer_is_hagiography_not_biography.html
.
John Tamny, RealClearMarkets, explains, “Investment, not consumption, is the driver of economic growth. And investment is all about producers’ devising new ways to produce abundant goods and services at prices that continue to fall.”  . . , And what of “money supply”? The latter is a consequence of economic activity, not Fed ease. Readers witnessed this up close in recent years amid the Fed’s feckless QE.  Copious amounts of dollars were “created,” but with growth slight Stateside, those dollars rapidly migrated out of the U.S.

Paul Volcker’s Principles Must Endure
Peter Ireland, E21
Former Federal Reserve Chairman Paul Volcker passed away this week at age 92. Volcker will always be remembered as the man who acted, singlehandedly, to end America’s “Great Inflation” of the 1970s. When he arrived at the Federal Reserve Board in August 1979, inflation as measured by annual changes in the consumer price index was running at 12%. When he left in August 1987, inflation was down to just 4%. Read more here.... (Photo: Alex Wong/Getty Images)

RIP Paul Volcker
Norman J. Ornstein | AEIdeas
The combination of intellect, integrity, drive, and commitment — along with decency, honor, and good humor — is rare and to be treasured and celebrated.

Paul Volcker Editorial of The New York Sun | December 9, 2019
https://www.nysun.com/editorials/paul-volcker/90935/
The death of Paul Volcker is a sad moment here at the Sun. The chairman of the Federal Reserve who, in the 1980s, conquered inflation slipped away Sunday after a long illness. Of all the public officials we covered over the decades, it is hard to think of one whom we admired more than Volcker and who will be more widely missed in America and abroad.
Continue Rea

US TAX CODE CANNOT HANDLE NEGATIVE INTEREST RATES

Where are the other IPOs in the Mideast?
 The Middle East needs to grow companies that do not depend on the state as a key investor.

Can Arab parties oust Netanyahu without empowering Liberman?
 Though its constituency's top priority is toppling Prime Minister Benjamin Netanyahu, the Joint List has not forgotten the vitriol expressed over the years by Yisrael Beitenu leader Avigdor Liberman.
 
 Efforts to tie Trump’s hands on Iran and Saudi Arabia hold up key defense bill
 Congressional efforts to tie President Donald Trump’s hands on Middle East policy have helped stall negotiations as Democrats and Republicans struggle to pass annual spending and defense authorization legislation.
 
Tehran welcomes China’s presence in Middle East
 Iran and China have much to offer each other, though on a limited basis.

​Congressional Testimony on the Costs of Rapidly Growing Government Debt

Monetary Policy: Rules Vs. Discretion
by John B. Taylor via PolicyEd
A rules-based monetary policy is more effective in promoting economic growth and stability than a discretionary monetary policy.

A Fast And Fun Way To Learn About Rules Versus Discretion
by John B. Taylor mentioning Hoover Institution via Economics One
The Hoover Institution has initiated a fascinating Perspectives on Policy video series in which experienced experts give clear explanations of key policy issues assisted by the latest in animation technology. This is not the typical video of talking heads as you might expect. In this imaginative series tabletop cartoon figures join the experts, move around the screen, bend and twist to show emotions, and even wave at each other from time to time. 

US ready to work with Russia on Libya 
The United States is ready to work with Russia on a solution to the Libyan crisis, Secretary of State Mike Pompeo said Wednesday following a meeting with Russian Foreign Minister Sergey Lavrov in Washington. “Foreign Minister Lavrov told me directly yesterday he is prepared to be part of that,” Pompeo told reporters. “I reminded him that there is a weapons embargo that is still in place in Libya, and that no nation ought to be providing incremental materiel inside of Libya.” The UN-recognized government in Tripoli has accused Russian mercenaries of backing strongman Khalifa Hifter's months-long assault on the capital.
Meanwhile, Hifter's forces accuses Turkey of arming Tripoli. The chief of staff of Hifter's naval forces, Faraj al-Mahdawi, threatened Wednesday to sink any Turkish ship that approaches the Libyan coast following a maritime border agreement between Tripoli and Ankara
Read More  ​

U.S. Imposes New Sanctions on Officials Tied to Iran’s Supreme Leader

US sanctions top Khamenei aides 
The Treasury Department marked the 40th anniversary of the US Embassy takeover in Tehran by sanctioning nine members of Iranian Supreme Leader Ayatollah Ali Khamenei on Monday. Newly designated individuals include Khamenei's son Mojtaba Khamenei, judiciary chief Ebrahim Raisi and Mohammad Mohammadi Golpayegani, Khamenei's chief of staff. Treasury also sanctioned Iran’s Armed Forces General Staff and its chief, Gen. Mohammad Bagheri. Separately, the State Department added $20 million to a reward for information about former FBI agent Robert Levinson, who disappeared in Iran 12 years ago.
Read More  
washingtonpost.com

Erdogan Continues to Reward Iran Sanctions Evaders
Aykan Erdemir — FDD Policy Brief
The European Bank for Reconstruction and Development (EBRD) announced yesterday that it will sell its 10 percent stake in the Istanbul stock exchange after Turkey named as its CEO a Turkish banker convicted in U.S. court for his role in a multi-billion dollar scheme to evade Washington’s sanctions on Iran. Ankara’s move to reward a sanctions buster further strengthens the argument that Turkey has become a permissive jurisdiction for illicit finance. Read More