Friday, February 17, 2017

Federal Reserve Chair Janet Yellen : "no amount of monetary policy stimulus can make up for the fiscal policy headwinds of a cumbersome, failed regulatory state, an uncompetitive tax code"

"Mother Goose " Testifies Before the Financial Services Committee


February 17,2017
one small voice


Wall Street , “Economic growth has been quite disappointing,” Federal Reserve Chair Janet Yellen acknowledged to the Financial Services Committee on Wednesday during her Semi-Annual Monetary Policy Report to Congress, echoing points made by Chairman Jeb Hensarling (R-TX) during his opening statement that Americans have suffered through eight years of subpar growth and stagnant paychecks.

“I believe the last eight years have shown that no amount of monetary policy stimulus can make up for the fiscal policy headwinds of a cumbersome, failed regulatory state, an uncompetitive tax code, Obamacare and Dodd-Frank,” Chairman Hensarling said. “All of these must be remedied and changed if we are to have a healthy economy for all and bank bailouts for none.”

Monetary Policy and Trade Subcommittee Chairman Andy Barr (R-KY) called for a strategy-based monetary policy rather than the Fed’s improvisational approach.

“The American people are ready for a change -- a change from the Fed's unconventional and unpredictable policies, a change from the Fed's inaccurate projections of growth, and a change from disappointing economic results. It's time for the Fed to begin prudently shrinking its balance sheet, end its easy money policies that have fueled government borrowing, and shift to a more firmly grounded strategy-based policy that will assure price stability, facilitate commerce wherever it shows promise, and create the conditions for strong economic growth,” he said.

Monday, February 13, 2017

Hensarling Statement on the Confirmation of Steven Mnuchin


February 13,2017
the staff of the Ridgewood blog


WASHINGTON DC, House Financial Services Committee Chairman Jeb Hensarling (R-TX) issued the following statement on Monday:

“I congratulate Steven Mnuchin on his confirmation to serve as Treasury Secretary, and I look forward to working with him in my capacity as Chairman of the Financial Services Committee to advance policies that will help all Americans raise their standard of living and create a healthy economy.”

Friday, February 10, 2017

How We’ll Stop a Rogue Federal Agency

Congress can defund Elizabeth Warren’s unaccountable
and unconstitutional CFPB.
By: Jeb Hensarling
Wall Street Journal
February 9, 2017
The Obama presidency placed no greater burden on America’s growth potential than the avalanche of regulations that smother the U.S. economic system. The most destructive and dangerous of the new regulatory bureaucracies created by the Democrat-dominated 111th Congress is the Consumer Financial Protection Bureau.

The CFPB stands with ObamaCare as a crowning “achievement” of Mr. Obama’s transformation of America. With unprecedented automatic funding provided directly by the Federal Reserve, the agency is unanswerable to anyone. Democrats chose to insulate it from Congress, the president, voters and the democratic process. The U.S. Circuit Court of Appeals for the District of Columbia noted as much in its recent PHH v. CFPB decision, which ruled the bureau’s governing structure unconstitutional. The court said the unelected CFPB director “enjoys more unilateral authority than any other officer in any of the three branches of government of the U.S. Government, other than the President.”

The CFPB is arguably the most powerful, least accountable agency in U.S. history. CFPB zealots have the power to determine the “fairness” of virtually every financial transaction in America. The agency defines its own powers and can launch investigations without cause, imposing virtually any fine or remedy, devoid of due process. It requires lenders essentially to read their clients’ minds, know and weigh their clients’ comprehension levels, and forecast future risk. It can compel the production of reams of data and employ methodologies that “infer” harm without finding any specific instance of harm or knowing violation.

The regulatory web spun by the CFPB can make every provider of financial services guilty until proven innocent, inviting selective enforcement and financial shakedowns. The CFPB is the embodiment of James Madison’s warning in Federalist No. 47 that “the accumulation of all powers, legislative, executive and judiciary, in the same hands . . . may justly be pronounced the very definition of tyranny.”

This tyranny has harmed the very consumers it purports to help. Since the CFPB’s advent, the number of banks offering free checking has drastically declined, while many bank fees have increased. Mortgage originations and auto loans have become more expensive for many Americans.

No corner of American finance is beyond the CFPB’s grasp, even auto dealers—which are specifically excluded from its jurisdiction by the Dodd-Frank Act. To dodge this legal constraint, the CFPB regulates auto dealers through enforcement “bulletins” on auto lenders, employing statistical analysis rather than specific acts to charge lenders with discriminatory lending. The race of borrowers is inferred based on the borrowers’ names and home addresses. Through this ruse they smear and shake down lenders.

The House in 2015 voted 332-96—with 88 Democrats in support—to force the CFPB to rescind its auto-lending guidance. Sen. Elizabeth Warren, the intellectual mother of the CFPB, led Senate Democrats’ opposition to the bipartisan bill. This is a sign the 52-member Senate Republican majority probably will be unable to overcome Democrat filibusters on legislation limiting the CFPB’s powers.

President Trump should immediately fire CFPB Director Richard Cordray, citing the president’s constitutional responsibility to take care that the laws are faithfully executed. A new director could first undo all harmful actions taken by the CFPB during the Obama era. He could then implement policies that actually benefit consumers, such as limits on class-action lawsuits wherein plaintiff law firms get fortunes but injured financial consumers get pennies.

The CFPB could also protect Americans from government abuses. A new director could penalize government bond issuers that fail to disclose unfunded pension liabilities. It could also put an end to government accounting and solvency standards that, if adopted by private companies, would result in fines or a firm’s closure.

Yet even with good policy, the CFPB would still be unconstitutional. For those who reject Sen. Warren’s view that the ends justify the means, the agency must be functionally terminated. Consumer protection can instead come through an accountable and constitutional process.

The Senate can achieve this with a simple majority vote. Dodd-Frank requires the Fed to fund all CFPB budget requests automatically—creating an estimated $6.6 billion funding stream over the next 10 years. Under a budget process known as reconciliation, the House Financial Services Committee, which I chair, and the Senate Banking Committee could be mandated to save $6.6 billion over 10 years of the budget. In the ensuing reconciliation bill the two committees could then direct the Fed to terminate CFPB funding. Senate Democrats could not filibuster the bill.

Congress could then transfer the CFPB’s consumer protection role to the Federal Trade Commission or back to traditional banking regulators, where it resided before the CFPB’s creation. A Senate point of order requiring 60 votes could be brought against these provisions, on the ground that they don’t belong in a reconciliation bill. The advantage of putting the restructuring language in the reconciliation bill is that if Democrats use the point of order to strike the language, they—not Republicans—would have elected to end all CFPB funding, leaving the new system of consumer financial protection to be decided in future legislation.

When Democrats sought to take consumer protection outside the democratic process, consumers were harmed by a reduction in competition. With fewer lenders serving fewer borrowers, fewer businesses employed fewer workers. A healthy economy is the first casualty of any war on credit, and a loan denied becomes a job lost. The CFPB has eroded freedom, trampled due process and killed jobs. It must go.

Tuesday, January 24, 2017

BURGERNOMICS: HERE’S A BIG MAC INDEX UPDATE



January 18,2017
the staff of the Ridgewood blog

Ridgewood NJ, our friends at Park Wealth Management reminded us that the Economist invented the Big Mac index in 1986 as an entertaining way to assess whether currencies were at the “correct” levels. The index reflects the idea that countries’ exchange rates should balance so the same product (in this case, a hamburger) costs the same in two different countries when the price is denominated in the same currency. After updating the index on January 11, 2017, The Economist reported the “all-meaty” dollar was stronger than usual: “The dollar is now trading at a 14-year high in trade-weighted terms. Emerging-world economies may struggle to pay off dollar-denominated debts. American firms may find themselves at a disadvantage against foreign competition. And, American tourists will get more burgers for their buck in Europe.”

A Big Mac in the United States cost about $5.06 last week. In the Euro area, the price was about $4.06 and in Britain $3.73. A Big Mac is cheapest in Russia ($2.15) and most expensive in Switzerland ($6.35). Here are the prices of a Big Mac (a.k.a. the Maharaja Mac in India) in a few other locales:



It should be noted the Big Mac index is not a perfect measurement tool. The price of a burger should be less in countries with lower labor costs and more in countries with higher labor costs.

When prices are adjusted for labor (using gross domestic product per person), the Brazilian real is the world’s most overvalued currency, followed by Pakistan and Thailand. The most undervalued currencies include Egypt, Malaysia, and Hong Kong.

Park Wealth Management is located at 216 East Ridgewood Ave , 2nd Floor Ridgewood NJ 07450 201 689-2020

Saturday, January 14, 2017

House Acts to Requires Cost Benefit Analysis of all SEC Regulations


January 13,2017
the staff of the Ridgewood blog


WASHINGTON - The House approved bipartisan legislation on Thursday to ensure that the benefits of proposed regulations from the Securities and Exchange Commission (SEC) justify the costs to jobs, economic growth, and capital formation.

The SEC Regulatory Accountability Act, sponsored by Financial Services Committee member Rep. Ann Wagner (R-MO), passed 243-184.

“Ill-advised laws like the Dodd-Frank Act empower unelected, unaccountable bureaucrats to callously hand down crushing regulations without adequately considering what impact those regulations have on jobs,” said Committee Chairman Jeb Hensarling (R-TX). “The true cost of Washington red tape includes the jobs not created, the small businesses not started and the dreams of our children not fulfilled.”

Under the bill, before issuing a regulation the SEC will be required to:

identify the nature and source of the problem its proposed regulation is meant to address; utilize the SEC’s Chief Economist to assess the costs and benefits of a proposed regulation to ensure the benefits justify the costs; identify and assess available alternatives; and ensure that any regulations are consistent and written in plain language.

Further, the legislation requires the SEC to engage in a retrospective review of its regulations every five years and conduct post-adoption impact assessments of major rules.

Thursday, January 05, 2017

Consumer confidence climbed in December to the highest level in 13 years


December 28,2016
the staff of the Ridgewood blog


Ridgewood NJ, Consumer confidence climbed in December to the highest level since August 2001. Americans were more upbeat about the economic outlook than at any time in the past 13 years, according to a report Tuesday from the New York-based Conference Board.