What we’re reading (6/23)
“Oil Prices Sink After Trump Announces Israel And Iran Have Agreed To Ceasefire” (Yahoo! Finance). “Oil futures fell late Monday after President Trump announced a ceasefire timeline for the Israel-Iran conflict. West Texas Intermediate fell about 4% to trade near $66 per barrel, while Brent crude, the international benchmark, also tumbled to hover near $68 per barrel.”
“Why Factories Are Having Trouble Filling Nearly 400,000 Open Jobs” (New York Times). “The pool of blue-collar workers who are able and willing to perform tasks on a factory floor in the United States is shrinking. As baby boomers retire, few young people are lining up to take their place. About 400,000 manufacturing jobs are currently unfilled, according to the Bureau of Labor Statistics — a shortfall that will surely grow if companies are forced to rely less on manufacturing overseas and build more factories in the United States, experts say.”
“A New Meatpacking Plant’s Novel Pitch to Attract American Workers” (Wall Street Journal). “Steep challenges loom. Sustainable Beef is taking on the Big Four meatpackers—JBS, Tyson Foods, Cargill and National Beef—that control 85% of the beef industry. Cattle herd sizes have hit a 75-year low. And President Trump’s immigration crackdown is targeting the backbone of an industry known for some of America’s most-grueling jobs.”
“Happy Birthday, Money” (Jason Furman). “For most of history, money had been tangible: gold, silver, wampum, salt blocks, jewelry beads. Paper in the form of private bills of exchange or promissory notes was rare (China and Japan are the notable exceptions here), used mainly by merchants and bankers, and generally able to be converted into some underlying commodity. That changed in 1690 when Massachusetts had a problem paying its bills from a failed expedition against French Quebec. London would not reimburse the costs. The raid itself captured no plunder. So the colony’s resourceful government did something that was effectively unheard-of in the Western world: It created 7,000 pounds in its own ‘bills of credit,’ basically paper currency, with only a vague promise that they would be paid back (but a guarantee that they would be legal tender for tax payments). It created what was effectively fiat money.”
“Interest On Reserves” (John Cochrane). “The proposal, starting with comments from Senator Ted Cruz, that the Congress force the Fed to stop paying interest on reserves is having more legs than I thought it would. It also seems to be suffused with confusion — at least the AI and top three pages of hits generated by a google search certainly are. Hence this post. One reason given is that it would save the government money, so including the proposal in the Big Budget Bill would help to hit deficit targets. In addition, interest on reserves is paid to a lot of foreign banks, and sending foreigners money so they can buy American goods is somehow out of fashion. One answer: If you think that is a good and reasonable idea, here is a better one: stop paying interest on all Treasury debt. Reserves are just another form of government debt, so why stop there? That will generate $1 trillion per year, not in 10 years or so. And lots of foreigners hold Treasury debt too.”
