Blow and Krugman

In “Don’t Coronate Carly Fiorina Just Yet” Mr. Blow says the candidate is weak on facts and on her understanding of the challenges less fortunate women face.  Prof. Krugman considers “The Rage of the Bankers” and presents the  truth about low interest rates, and why the arguments against leaving them alone seem to keep changing.  Here’s Mr. Blow:

The media has a new darling in the Republican presidential disaster pageant: Carly Fiorina.

She dominated, “dropped the mic,” “owned the stage” and of course she did it all while “standing in a pair of 3½-inch heels for three hours.”

This amount of drooling should come with a year’s supply of bibs.

It is true that she found a way to effectively engage and combat the Republican front-runner, something her male counterparts had struggled to do. Good for her.

But before the fawning frenzy spins out of control, let’s take a breath and an honest look at whom it is that is being cheered.

Part of Fiorina’s appeal, at least among Republicans, is the thirst for an outsider. A Washington Post/ABC News poll taken earlier this month found that 58 percent of Republicans and 64 percent of conservative Republicans want the next president to be “someone from outside the existing political establishment.”

Like the other candidates at the top of the Republican field, Fiorina seems to fit that bill. Only Fiorina isn’t a political outsider by choice, but by defeat.

The media has a new darling in the Republican presidential disaster pageant: Carly Fiorina.

She dominated, “dropped the mic,” “owned the stage” and of course she did it all while “standing in a pair of 3½-inch heels for three hours.”

This amount of drooling should come with a year’s supply of bibs.

It is true that she found a way to effectively engage and combat the Republican front-runner, something her male counterparts had struggled to do. Good for her.

But before the fawning frenzy spins out of control, let’s take a breath and an honest look at whom it is that is being cheered.

Part of Fiorina’s appeal, at least among Republicans, is the thirst for an outsider. A Washington Post/ABC News poll taken earlier this month found that 58 percent of Republicans and 64 percent of conservative Republicans want the next president to be “someone from outside the existing political establishment.”

Like the other candidates at the top of the Republican field, Fiorina seems to fit that bill. Only Fiorina isn’t a political outsider by choice, but by defeat.

But more importantly during Wednesday’s debate, Fiorina unleashed a scurrilous attack in her pitch to defund Planned Parenthood, saying of the attack videos released about the group:

“I dare Hillary Clinton, Barack Obama to watch these tapes. Watch a fully formed fetus on the table, its heart beating, its legs kicking, while someone says, ‘We have to keep it alive to harvest its brain.’ “

In fact, the footage of the fetus was “stock footage” that “was added to the video to dramatize its content,” according to PolitiFact, which rated Fiorina’s comments as “mostly false.” FactCheck.org also said: “We are aware of no video showing such a scene.”

As Talking Points Memo’s Josh Marshall put it Friday: “Fiorina has a habit of simply making things up.”

But in a way, the veracity of the attack is only one of the problems here. The other is that Fiorina would deny reproductive health services to women who have vastly fewer resources, or choices, than she does.

Adele M. Stan on Thursday captured Fiorina perfectly in a blistering assessment in The American Prospect.

“The evil genius of Fiorina,” Stan wrote, “is her uncanny ability to play the gender warrior within the GOP while promoting the party’s misogyny.” Stan continued: “But her feminism seems to begin and end with the fortunes of Fiorina herself, and seeing as she probably doesn’t rely on Planned Parenthood for her health care, she’s happy to deprive millions of women of that care by promoting outright lies about the organization, as in her false description of the video she referenced.”

This distancing herself from the realities of less fortunate women is not new for Fiorina. When she became C.E.O. of Hewlett-Packard in 1999, she made the preposterous claim that “there is not a glass ceiling… My gender is interesting but really not the subject of the story here.”

How many American women pressed up against that glass would agree with her?

In 2005, Fiorina was unceremoniously ousted from that job. Since then, Fiorina has been trying to rewrite the narrative of that firing, pitting herself as the victim of an old boys’ club with a hint of cruelty, which couldn’t understand and appreciate her. She frames the firing as more about culture than performance.

But after Fiorina’s memoir “Tough Choices” was released in 2006, my colleague Joe Nocera wrote a column entitled “Carly Fiorina’s Revisionist Chronicles” that detailed Hewlett-Packard’s lackluster performance during her tenure and stated emphatically:

“So I come here this Saturday morning to offer a simple corrective. Carly, itwas about performance. And if you didn’t realize that then — and can’t admit it now — you should never have been Hewlett-Packard’s chief executive in the first place.”

We also have to ask ourselves now if Fiorina is the kind of person who should be president.

And now here’s Prof. Krugman:

Last week the Federal Reserve chose not to raise interest rates. It was the right decision. In fact, I’m among the economists wondering why we’re even thinking about raising rates right now.

But the financial industry’s response may explain what’s going on. You see, the Fed talks a lot to bankers — and bankers reacted to its decision with sheer, unadulterated rage. For those trying to understand the political economy of monetary policy, it was an “Aha!” moment. Suddenly, a lot of what has been puzzling about the discussion makes sense: just follow the money.

The basic principles of interest rate policy are fairly simple, and go back more than a century to the Swedish economist Knut Wicksell. He argued that central banks like the Fed or the European Central Bank should set rates at their “natural” level, defined in terms of what happens to inflation. If rates are too low, inflation will accelerate; if rates are too high, inflation will fall and perhaps turn into deflation.

By this criterion, it’s hard to argue that current rates are too low. Inflation has been low for years. In particular, the Fed’s preferred inflation measure, which strips out volatile food and energy prices, has consistently fallen short of its own target of 2 percent, and shows no sign of rising.

It’s true that rates — near zero for the short-term interest rates the Fed controls more or less directly — are very low by historical standards. And it’s interesting to ask why the economy seems to need such low rates. But all the evidence says that it does. Again, if you think that rates are much too low, where’s the inflation?

Yet the Fed has faced constant criticism for its low-rate policy. Why?

The answer is that the story keeps changing. In 2010-2011 the Fed’s critics issued dire warnings about looming inflation. You might have expected some change in tune when inflation failed to materialize. Instead, however, those who used to demand higher rates to head off inflation are still demanding higher rates, but for different reasons. The justification du jour is “financial stability,” the claim that low interest ratesbreed bubbles and crashes.

I suppose this latest excuse for raising rates could be right. But it’s striking how convoluted and dubious the case for rate hikes has become. I like to think of it this way: if left-leaning politicians were to offer rationales for their policies that were this dependent on shaky logic and weak evidence, they would be lambasted for their irresponsibility. Why does anyone take this stuff seriously?

Well, when you see ever-changing rationales for never-changing policy demands, it’s a good bet that there’s an ulterior motive. And the rate rage of the bankers — combined with the plunge in bank stocks that followed the Fed’s decision not to hike — offers a powerful clue to the nature of that motive. It’s the bank profits, stupid.

Many people have been led astray here by trying to figure out whether easy money is good or bad for wealthy people in general. That’s actually a complicated question. What’s clear, however, is that low rates are bad for bankers.

For banks make their profits by taking in deposits and lending the funds out at a higher rate of interest. And this business gets squeezed in a low-interest environment: the rates banks can charge on loans are pushed down, but rates on deposits can only go so low. The net-interest margin — the difference between the interest rate banks receive on loans and the rate they pay on deposits — has fallen sharply over the past five years.

The appropriate response of policy makers to this observation should be, “So?” There’s no reason to believe that what’s good for bankers is good for America. But bankers are different from you and me: they have a lot more influence. Monetary officials meet with them all the time, and in many cases expect to join their ranks when they come out on the other side of the revolving door. Also, it’s widely assumed that bankers have special expertise on economic policy, although nothing in the record supports this belief. (The bankers do, however, have excellent tailors.)

So we shouldn’t be surprised to see institutions that cater to bankers, not to mention much of the financial press, spinning elaborate justifications for a rate hike that makes no sense in terms of basic economics. And the debate of the past few months, in which the Fed has seemed weirdly eager to raise rates despite warnings from the likes of Larry Summers that it would be a terrible mistake, suggests that even U.S. monetary officials aren’t immune.

But the Fed did the right thing last week: nothing. And the howling of the bankers should be taken not as a reason to reconsider, but as a demonstration that the clamor for higher rates has nothing to do with the public interest.

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