Risking the Risk-Free Rate

Investors balance risk with expected return when deciding where to put their money; the greater the risk, the higher interest rate they demand.  

The baseline for this is the ‘risk-free’ rate, for investments which have zero risk of default. US Treasury investments are used in these calculations - they don’t pay much interest, but they don’t miss payments. 

Once again, some politicians are playing chicken with our nation’s finances for political ends.  A refusal to raise the debt ceiling risks a default on payments for money we have already borrowed.  Investors will continue to fund our debt, but even the threat of a default will lower our nation’s credit rating, making borrowing more expensive. 

It’s childish and dangerous - and exactly what we can expect from those running Congress for the next two years. 

McCarthy's Followership Post

This would be funny, if the end result of this farce wasn't destined to be a key component of our national government.  

Whether he gets enough votes today, tomorrow, or the next day, Kevin McCarthy will be beholden to some of the most ignorant, partisan members in Congress for his position - and will need to vet his every move through them for the duration of his tenure.  He will be 'Speaker', but not a leader. 

Since these individuals adamantly oppose any inter-party cooperation, this assures that the legislative wing of government will be stalemated.   

Pelosi's Legacy

A leader's legacy is rarely fully realized until time has passed since their leadership ended.

That being said, it seems clear that Nancy Pelosi will be remembered in history as one of the most effective House speakers in our history, on par with Joe Cannon, Sam Rayburn, Newt Gingrich - even going back to Henry Clay.

We may like or dislike any of these House speakers, but they knew how to promote their agendas; generally, we like the ones who share our agenda, and dislike those with whom we disagree.

There are still some who have not reconciled themselves to the reality of a woman wielding this much power, but that view is being relegated to the dustbin of history. When evaluated on less personal criteria, the long view will deem her tenure as among the most effective speakers in our nation's history.