European Bank Chief Is Cool to a Rate Cut
PARIS — A day after the Federal Reserve announced an emergency rate cut in the United States in the face of a stock market meltdown, the president of the European Central Bank
on Wednesday dashed hopes of any short-term rate relief on the Continent.
“In demanding times of significant market correction and turbulence,” he said, “it is the responsibility of the central bank to solidly anchor inflation expectations to avoid additional volatility in already highly volatile markets.”
He did not discuss the Fed’s surprise decision to cut its target for the federal funds rate — the interest on overnight loans between banks — by three-quarters of a point to 3.5 percent, the biggest single-day move by the central bank in its history.
. . . “We would have to see some bad news from the real economy rather than the markets,” before policy makers, whose main mandate is to fight inflation, cut rates, he said.
Back in the bad old days of the Clinton administration, when trade deficits were under control, the budget balanced, we produced an excess of taxes over expenditures and kept our national gun in its holster, the euro was worth 60 cents.
Not good enough.
9-11 did not cause the euro to climb to $1.30 against the dollar. Our willingness to go along did that;
- Accepting $2 trillion in tax breaks to the rich without offsetting income
- Fighting (and losing) the most expensive unfunded war in American history
- Allowing the privatization of federal government to no-bid crony business interests
- Agreeing to let the administration spend $1 billion a day we don’t have and won’t have
- Encouraging the Federal Reserve to allow bank and security fraud in the name of home ownership
Those stodgy old Europeans we love to taunt for their socialist ways and slow-moving economies have done a tortoise and hare job on America.
But not without our willing encouragement. Not without three times electing those who took our willingness to accept, fight, allow, agree and encourage as a confirmation of their grand plan.
Architect Daniel Burnham, early in the last century said, “make no small plans, they have no magic to stir men’s souls.” And he was right. His grand plan gave Chicago its magnificent and unblemished lakefront.
But there’s a difference between magic and treason.