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Should Biden Reappoint Jerome Powell? It Depends on His Theory of Change.

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Should Biden Reappoint Jerome Powell? It Depends on His Theory of Change.


President Biden is facing a big decision, and deep divides among his allies. Should he reappoint Jerome Powell to lead the Federal Reserve when Mr. Powell’s term ends early next year, or select a replacement who is more fully aligned with the Democratic policy agenda?

Pro-Powell forces argue that he has proved exceptionally committed to generating a robust job market that will lead to better conditions for American workers. Those who argue against reappointment say that he has been too soft a regulator of banks and other financial institutions, and that he is insufficiently committed to using the Fed’s powers to combat climate change.

But there is a more fundamental question for President Biden: What is his theory of how change happens?

Credit…Ann Saphir/Reuters

One theory of change is that, when a party wins the presidency and the Senate (however narrowly), it should put in place appointees who are fully fledged adherents of its agenda. These appointees will then push that agenda with every possible tool at their disposal. If they make lots of enemies, or see their more aggressive actions struck down by courts — or generally emerge as polarizing forces — so be it.

If Mr. Biden were to take this approach, he might seek a firebrand for the top job at the Fed, betting that the nominee could both secure confirmation in a closely balanced Senate and steer the nation’s central bank toward a more activist stance on a range of liberal priorities.

A reappointment of Mr. Powell would follow the opposite theory of change. In this version, there is great value in appointees who have the biography and political skill to make urgent policy changes seem sensible and reasonable, not scary. This strategy, the logic goes, will make more aggressive policy action achievable. And it could also make it more durable in the face of court challenges and changes in the control of government.

Another leading candidate for the job, Lael Brainard, 59, would essentially split the difference between those approaches. She has been a Fed governor for the last seven years, collaborating closely with Mr. Powell and other top leaders of the central bank.

She is hardly a firebrand; her speeches are carefully crafted and her positions well within the economics mainstream. But she is a Democrat who donated to Hillary Clinton’s presidential campaign in 2016 and who dissented on numerous actions to loosen bank regulations championed by Trump appointees. She has also expressed public alarm about the economic implications of climate change.

It is a distinctly different background and persona from Mr. Powell, a 68-year-old Princeton graduate who worked as a Wall Street dealmaker and private equity executive. He served in the George H.W. Bush administration, and was appointed to lead the central bank by President Donald J. Trump.

He has also become, in recent years, a full-fledged convert to the religion of full employment. This is the view that the Fed should allow the economy to run hot enough that opportunity opens to people across American society, including historically marginalized groups.

This view is more commonly embraced on the political left. But Mr. Powell came to it over the second half of the 2010s, as the labor market improved to levels far beyond what the Fed’s own economic models had envisioned without spurring unwelcome inflation.

His stewardship of the Fed is, in that sense, the 21st-century American embodiment of the concept of “Tory men, Whig measures.”

The phrase, from a 19th-century novel by Benjamin Disraeli, who would go on to become British prime minister, refers to a government in which hardheaded conservatives (the Tories) nevertheless carry out ideas that originated in left-of-center (Whig) circles, aimed at improving life for the masses.

What would that mean if Mr. Powell were to be appointed to a second term as Fed chair starting in early 2022?

It would mean that the major rethinking of the Fed’s approach to the labor market would continue to be led by a registered Republican whom 84 senators voted to confirm in 2018. Ms. Brainard was confirmed with 61 votes in 2014, including 11 Republicans.

Part of the case for reappointing Mr. Powell is that his mere presence — his credibility on both sides of the aisle in Congress and on Wall Street — would be an asset to the administration’s broader economic project at a time of surging inflation and bubbly financial markets. The fact that he is not a Biden ally, or a Democrat at all, becomes a feature rather than a bug.

“Part of the Biden mantra has been to restore civility and downplay partisan tensions,” said Sarah Binder, a George Washington University professor who has written extensively on the Fed’s place in American politics. “It’s somewhat fortuitous for Biden that if he wants to reappoint Powell he can do it under the guise of restoring the independence of the Fed even though Powell thoroughly fits his views on monetary policy.”

During Mr. Powell’s chairmanship, the Fed has weakened several restrictions on big banks, loosening the capital and liquidity requirements placed on them, among other steps. It has also allowed several large bank mergers to occur.

Ms. Brainard’s dissents from regulatory actions were unusual for the consensus-driven Fed. When she was the lone vote against one action in 2018, no governor had dissented from one in seven years. She would go on to dissent 20 times over the next three years.

In regulatory policy, Fed leaders traditionally defer to elected leaders while aiming to maintain a wall of independence around monetary policymaking. And that has been enough to make presidents willing to reappoint Fed leaders from the other party even when they have disagreements over regulatory approach.

The Fed chair Ben Bernanke, for example, was a Bush appointee. He was supportive of regulatory changes put in by the Obama-appointed Fed governor Dan Tarullo, and President Obama went on to reappoint Mr. Bernanke. Notably, as a Fed governor, Mr. Powell did not dissent from any regulatory steps championed by Mr. Tarullo.

And while those cross-party reappointments have parallels to this moment — see also Ronald Reagan/Paul Volcker and Bill Clinton/Alan Greenspan — there may be an even closer historical parallel.

In the 1930s, Franklin Delano Roosevelt turned not to any of the bright New Deal economists who were advising him on policy, but to a Utah banker named Marriner S. Eccles.

Mr. Eccles embraced deficit spending and loose monetary policy to help propel the nation out of the Great Depression, but presented himself as merely a pragmatic businessman recommending a sensible course. He distanced himself from the more academic intellectuals tied to the administration.

“Eccles served a very important purpose for the Roosevelt administration because he was a millionaire who espoused policies that were friendly to what Roosevelt wanted to do,” said Eric Rauchway, a historian at the University of California, Davis, and author of “Why the New Deal Matters.”

In public appearances, Mr. Eccles emphasized that he arrived at his views not by reading John Maynard Keynes or other influential intellectuals of the era, but by working through things on his own. And while Mr. Eccles was closely aligned with the Roosevelt inner circle on macroeconomic management, he was more wary of other administration policies that involved expansive government control of the economy. And that, Mr. Rauchway said, was why he was placed at the Fed instead of the White House or Treasury.

Mr. Biden is weighing a decision that will shape the economic backdrop of the remainder of his term. The question is whether the political logic that led Mr. Roosevelt to Mr. Eccles — and that led several other presidents to reappoint central bankers from the opposite party — applies in a world of high polarization and exceptionally high stakes.



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Senses Fail Wins With Joshua Tree Sessions Film Project

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Senses Fail Wins With Joshua Tree Sessions Film Project


Senses Fail has been a band for twenty years.  They are a classic four piece band whose sound is post-hard core or emo, similar to My Chemical Romance.  Buddy Neilsen is their lead singer and for the past six years the primary songwriter for the band. The band members include Nielsen, bassist/guitarist Gavin Caswell, drummer Steve Carey, bassist Greg Styliades and guitarist Jason Milbank. Typically Senses Fail plays in rooms which seat 1,500 – 3,000 people.

Like all musicians who have been forced to pivot because of Covid-19, Senses Fail has begun to find new ways to connect with fans, deliver music and create revenue for themselves.  The past year has shown a new willingness for fans to purchase livestreams when going to in person events is more challenging than it was prior to Covid.  Even outside of pandemic, the band’s fans are now mostly millennials in their 30’s now having children and don’t necessarily want to go out.  From this lens, the band saw a new opportunity to connect with their fans who were reluctant to go out and decided to pivot.

Senses Fail recently did something bold.  They took the money lent them by the Small Business Administration as part of their EIDL (Economic Injury Disaster Loan) and filmed a live performance in Joshua Tree.  This project, The Joshua Tree Sessions, was the single most expensive outlay ever made by the band.  They hired a director utilizing a film crew with 12 Blackmagic cameras.  The intention was to deliver a high quality one time single view event, rather than just another streamed concert.  The intention was to deliver something more than what the viewer was expecting.  For these reasons, the band took a significant upfront financial risk.  Just the rental of the cameras cost more than a car.   The project worked exactly as was intended by the SBA’s EIDL program:  the band used the money to create a product, which they then sold at a profit – attracting approximately 3,000 purchases of the live stream.  

For Buddy Neilsen, Joshua Tree, CA has been the touchstone for many significant live events.  It was there he found out his wife was pregnant with their first child, and there where he was a first responder to a terrible rock climbing accident.  Witnessing that accident was transformative for Buddy changing both the path of his life and inspiring him to fully commit himself to Senses Fail.  Because of this connection he has to Joshua Tree, and the many life altering events which happened there for him, it made sense to use that location to make new art.

But, building a concert in the desert is not easy.  It requires bringing in everything.  It’s often said there’s a lot of holes in the desert.  What’s less often said is that you can’t do much with a hole.  Senses Fail had to bring in everything from generators to create power, to mixing consoles, gear, lighting, trusses and even porta potties.  This is where art can get complicated.  Christo used to string miles of canvas across open land and over rivers, or wrap floating islands at sea.  Any vision can be executed with proper planning and budgeting.

Senses Fail planned a spectacle, with full production, and complex backdrops so they could film live performances of their 2004 debut Let It Enfold You and their next album Still Searching. They played these two albums in full at Joshua Tree. These performances constituted the Joshua Tree Sessions which were then made available by stream.

By offering their Joshua Tree Sessions to fans over a very short period of time, Sense Fail created both scarcity and urgency.  The end result is Senses Fail recreated community among its fans who all had to show up within the limited window the concert was available, or miss it forever.  The band is not going to replay the show.  It’s gone.  This is much like the model at a music festival where the headliner only plays when they play.  If they’re truly massive, like Foo Fighters or Green Day, nearly the entire population of the festival masses together, with most listening to the live music but essentially watching it performed on the screens because of their distance from the stage. 

For Senses Fail, or any similar band, there are presently five streams of revenue: live performance, streamed performance, merchandise including recorded music, publishing and sponsorship or advertising.  Senses Fail will release a vinyl album of their concert, but their plan does not contemplate future viewings of the video.  And, because of the quality of the production, Senses Fail was able to get a distribution deal for the album.  The album was recorded on their own label NAME***  , but Senses Fail has now partnered with a distributor as a result of the live stream while continuing to own their own content and masters.

The band is currently on a club tour in support of Bayside, a band celebrating their own 20th anniversary.  Senses Fail plans to release their new album Prose early next year.  This album is a more literary project, a modern commentary on the frailty and momentariness of life and what it’s like to live in current society as a parent during these times.  Half of the record is based on T.S. Elliot’s Wasteland, the other half is based on Walt Whitman’s poem To Think Of Time.

Their upcoming projects include a new vinyl box set made out of recyclable content which can be put into the soil and ultimately grow into a plant.  They are also making a version of their album where the vinyl has pressed flowers within.  These items, show the care in which Senses Fail creates the offerings for their fans.  They go way in depth in thinking out the possible options.  Senses Fail’s strategy with merchandise is to go  build different tiers and lots of choices.  By making that extra effort, the band continues to build community and engagement with their fans while driving revenue. 

Here is our conversation in both video and audio podcast formats:

I found Buddy Neilsen to be endearing as we discussed his approach to the band, the process of song creation and the ways in which Joshua Tree has impacted his life. There’s a certain literary aspect to the way in which he creates songs, and it shows in his manner of speaking and in the work he produces.

Ultimately, in a competitive world like music, the winner is always those whose projects emanate from the arts and those creators who prioritize their art.  Senses Fail is a misnomer.  In the way this group approaches its own business and what they offer their fans, their more accurate description would be Senses Succeed. I’m intrigued to see what they produce next.



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UK set for most widespread pay rises in over a decade – CBI By Reuters

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UK set for most widespread pay rises in over a decade – CBI By Reuters


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© Reuters. FILE PHOTO: Workers walk to work during the morning rush hour in the financial district of Canary Wharf in London, Britain, January 26, 2017. REUTERS/Eddie Keogh/File Photo

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By David Milliken

LONDON (Reuters) – More British employers are planning pay rises than at any time since the global financial crisis as they struggle to recruit staff following the coronavirus pandemic and Brexit, data from the Confederation of British Industry showed on Monday.

The CBI said 44% of businesses intended to raise pay in line with inflation and 24% planned above-inflation pay rises, the highest combined percentage since it started surveying businesses about this in 2009.

“Pay intentions are rising across the board as firms reopen and the economy recovers,” Matthew Percival, the CBI’s director of skills and inclusion said.

However he warned that businesses were likely to pass on higher wage bills to their customers unless productivity improved, especially as many also needed to repay loans taken out last year during the pandemic.

The prospect of higher prices is likely to concern the Bank of England as its policymakers meet this week. The BoE expects a short-term rise in inflation due to higher oil prices and supply-chain bottlenecks, but so far has said it does not expect lasting inflationary pressure from the job market.

Just over three quarters of the 422 firms polled by the CBI and recruiters Pertemps Network in late August said labour shortages were hurting competitiveness, the highest proportion in over five years.

The CBI renewed its call for the government to ease post-Brexit visa restrictions on European Union workers with in-demand skills.

Separately, manufacturing trade body Make UK said its members were seeing the fastest output growth in more than 30 years and expected output to return to pre-pandemic levels by the end of 2022, sooner than previously forecast.

“Growth prospects continue to accelerate for manufacturers as economies at home and abroad continue to open up. However, supply chain shortages and the rapidly escalating increase in shipping costs are threatening to put roadblocks on the road to faster growth,” Make UK chief executive Stephen Phipson said.

Make UK also criticised a recent government decision to raise employers’ social security contributions.

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Stock futures dip after Dow notches three straight losing weeks for first time in 2021

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Stock futures dip after Dow notches three straight losing weeks for first time in 2021


A trader works on the floor at the New York Stock Exchange, August 27, 2021.

Source: NYSE

U.S. stock futures dipped in overnight trading Sunday after the Dow Jones Industrial Average turned in three straight weeks of losses for the first time since September 2020.

Futures on the Dow shed 114 points, or 0.3%. S&P 500 futures fell 0.3% and Nasdaq 100 futures ticked 0.2% lower.

Stocks have struggled in September, a seasonally weak month for the market.

The Dow closed Friday’s regular session 166.44 points, or 0.5%, lower at 34,584.88. The S&P 500 shed 0.9% to 4,432.99 and the Nasdaq Composite lost 0.9% to close at 15,043.97.

The S&P 500 saw its biggest trading volume Friday since July 19, more than doubling its 30-day average volume. Friday coincided with the expiration of stock options, index options, stock futures and index futures — a quarterly event known as “quadruple witching.”

All three major averages are negative for the month, but still sit less than 3% below their all-time highs.

The Federal Reserve’s highly anticipated September meeting is set to occur this week. Fed Chair Jerome Powell will hold a press conference Wednesday at the conclusion of the two-day meeting. Investors are awaiting insights about the Fed’s tapering of its easy monetary policy.

Powell has said the so-called tapering could occur this year, but investors are waiting for more specifics, particularly after mixed economic data released since Powell’s last comments.

“Factors to build a ‘wall of worry’ are present (i.e., China, supply chain issues, Fed policy, debt ceiling, infrastructure/tax bill), though markets are not too disturbed for now. Normal pullbacks and volatility are to be expected, and we would use these periods as opportunities,” Raymond James Chief Investment Officer Larry Adam said in a note.

Investors also await a number of major quarterly earnings reports this week with Adobe, FedEx, Darden Restaurants, Nike and Costco posting financial results.



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