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Does the Public Get a Say on Interest Rates?

close-up photograph of Canadian bank notes covering politician's face

Canada is in the midst of a housing crisis – the average cost of a house has risen to over $700,000 while the cost of renting has also skyrocketed. The country is also facing inflation with a high of eight percent at one point and food prices that keep increasing. After years of very low interest rates, and in response to rising inflation, the Bank of Canada has raised interest rates eight times since April of 2022. While inflation has fallen, it still persists, and the Bank has not reached its target of two percent. With the cost-of-living problem and the worry that Canada might enter (or is already in) a recession, some politicians have called on the Bank not to raise interest rates further. Nevertheless, economists have expressed worry about the political influence on the central bank. Is it appropriate for politicians to attempt to influence monetary policy in this way?

Something of a controversy emerged at the end of August when British Columbia Premier David Eby issued a plea to the Bank of Canada to pause any potential rate hikes. With the rate now at five percent and inflation still present, there was concern that further hikes were on the horizon. In a letter to Bank of Canada Governor Tiff Macklem, Eby pleads to consider the “human impact” of increasing rates again and claims that unnecessary increases would pose a danger to both homeowners and renters. The Government of Canada and the Bank of Canada have had an agreement since 1991 that the Bank would commit itself to an inflation target of two percent, and Macklem has been firm in insisting on hitting that target: no more and no less.

In response to this unusual public plea from a politician to the central bank, some economists are expressing frustration. UBC Okanagan associate professor Ross Hickey has called Eby’s move a “reckless act.” The appeal jeopardizes the impartiality, independence, and non-partisanship of the bank.

We don’t want our central bank to respond to politicians at all, it’s independent. It’s akin to the Supreme Court of Canada, we don’t want the Supreme Court of Canada to be responding to what politicians say in letters … we want the Bank of Canada to follow its mandate to pursue keeping inflation at a target of two percent per year.

Hickey is adamant that asking a justice to change their decisions to suit an appeal on various people’s behalf would be wrong. As Hickey describes the move, “I understand you’re independent, but I still want you to do something for me, that’s gobbledygook.”

The situation became more nuanced when the Conservative Premier of Ontario, Doug Ford, issued a letter of his own five days later similarly calling on the bank to halt hikes making it difficult for people to make ends meet. Having entered into a black-out period prior to rate change announcements, the Bank did not respond to either letter. Nevertheless, when the announcement did finally come, the Bank held interest rates steady. There is no evidence to suggest that these appeals had any effect on the Bank’s decisions, and the federal government has placed almost the entire onus for dealing with inflation on the bank, not wanting to get involved in the issue. But is Hickey right that it’s wrong for politicians like Ford and Eby to make such an appeal?

Typically, a lot of importance is assigned to central bank independence and on maintaining inflation targets. These targets reassure people and businesses that they can make long-term financial plans. Central bank independence from political leadership aims to ensure stability by preventing political interference favoring short-term considerations. If the independence of the central bank is undermined, it could erode confidence, creating financial instability. Given this, Hickey may be right that public pleas from politicians are a bad idea.

On the other hand, so much of this argument hinges on how we understand the concepts “independence” and “risk.” First, let’s respond to Hickey’s analogy about the justice system. There are, in fact, ways in which you might indicate to an independent judge what you would like them to do and still have the court retain its independence. They are called courtrooms. Nothing about appealing to a person or making one’s preferences known inherently subverts independence. In fact, governments are often granted “intervener” status in court. If I ask a judge to not convict someone of a crime before they make their judgment, it doesn’t stop the judge from coming to their own decision. So long as I cannot override the judge or imply that I will fire them if they do not decide what I want, their independence need not be threatened. Independence does not imply that you cannot appeal to people as they make their choice, it just implies that at the end of the day, the choice is theirs to make. The same is true of the central bank and the case of these Premiers. There is no way for either Premier to exert any direct influence.

Second, Hickey’s point that we don’t want central banks to respond to politicians at all is inherently self-defeating. The two-percent target only started as part of an agreement in 1991, having shifted from an initial five-percent aim. The two-percent target as a long-term goal was only standardized after 1998. That target has been renewed several times, as recently as 2021 where the government gave additional leeway to consider employment as they consider how to meet their goal. Central banks, then, should have to respond to concerns of the public; they are not above reproach, and to suggest that a central bank should not have to respond to public concerns is undemocratic.

But while the bank can set a target, we can still have public discussions about how best to achieve that aim. Central banks are not above reproach, and it’s undemocratic to suggest that economic policy is not a public issue. Some economists, for example, have criticized the federal government for leaning so heavily on the central bank and interest rates to solve the problem. Indeed, this is the point that Eby’s letter was attempting to make. The bank’s actual mandate, for example, requires a target of 1-3% inflation over “the medium term.” There is no hard-and-fast rule for how fast the target must be met. Given this, it’s not even obvious that Eby and Ford were asking the Bank to act against its mandate. As there are different ways to measure inflation and different assumptions involved in making inflation projections, political debate seems necessary. It should not be the case that the central bank’s methodology or approach for fulfilling their mandate are beyond the public’s purview.

There are, for example, reasons to question the assumptions that underpinned inflation targets in the 1990s and whether this strategy should be used to fight inflation today. Unlike the 1990s, inflation is not the result of decades of rising wages. Instead, it is the product of global politics – such as the war in Ukraine – and, more significantly, supply chain issues caused by the COVID-19 pandemic. These new factors may mean we need to approach the present situation differently. Surely there is some way to adopt temporary changes to monetary policy without the sky falling. Some, for instance, have floated the idea of temporarily adopting a three-percent target. Economists, meanwhile, balk and continue to decry “political interference.”

Still, there are reasons for thinking that economic policy requires political oversight. Ultimately, comments like Hickey’s and others’ exemplify a technocratic mindset that undercuts democratic discussion by relying on the assumptions of experts that remain closed off from public scrutiny.

Revenge Porn, Public Interest, and Free Speech

image of camera lens blended with an image of an eye

After resigning from office in 2019, former California Representative Katie Hill has been dragged back in the news. Hill’s lawsuits against the Daily Mail and RedState for publishing nonconsensual pornography were recently dismissed, and, to add insult to injury, she was ordered to pay more than $200,000 in defendants’ legal fees. Not only was Hill denied the possibility of being made whole, but was also forced to pay for the “privilege of them publishing nude photos … obtained from an abuser.”

How did we get here? Why is Katie Hill continuing to foot the bill for being made the target of “revenge porn”? How could the distribution of others’ private sexual images without their consent ever be protected by the First Amendment? Shouldn’t respect for individual privacy trump others’ interest in publicizing such intimate information?

In 2019, news broke that Hill and her then-husband had been involved in an improper relationship with a junior employee. Texts surfaced suggesting one of Hill’s campaign workers was not only engaged in a sexual relationship, but that she might also have been abused. It was further alleged that Hill was romantically involved with a congressional aide. RedState and the Daily Mail added fuel to the fire by publishing a number of suggestive and salacious photos. With rumors of a media trove containing hundreds of additional pictures and texts and a congressional probe just beginning, Hill resigned.

These revelations were no small thing; they suggested more than a mere lapse in judgment. The asymmetric power relation between the would-be congresswoman and a subordinate demonstrated a failure of responsibility and constituted an abuse of power. These charges must be taken seriously.

But the question of whether Hill’s relationship with a campaign staffer was improper (it was) should be kept separate from the question of whether the Daily Mail and RedState were acting in the public interest by choosing to publish nonconsensual pornography.

Judge Yolanda Orozco, who dismissed Hill’s case, claimed that the media outlets’ circulation of those nude photographs served a compelling public interest in questioning Hill’s “character, judgment and qualifications for her congressional position.” The electorate, she argued, deserved to bear witness to their representative’s apparent vices, and these news organizations were merely serving a democratic function in satisfying that need. The photos “allegedly depicted [Hill] with a campaign staffer whom she was alleged to have had a sexual affair with and appeared to show [Hill] using a then-illegal drug and displaying a tattoo that was controversial because it resembled a white supremacy symbol.” These, Orozco insists, are important details that the public has a right to know, or, at least, that news organizations have an overriding interest in disseminating.

This reasoning, however, appears to provide an incredibly broad read of what qualifies as a “matter of public concern.” Indeed, it seems to offer a blank check to any gossip or tabloid journalism that people might be able to put to good (political) use. (Consider, for example, the recently leaked video of New York City Council candidate Zack Weiner.) This justification does more than simply make the relaying of private information an important social good. Instead, Orozco’s position suggests that it is people’s feelings about the information, not the legal relevance of the information itself, which should determine the permissibility of sharing revenge porn. Whatever distaste or revulsion an image might provoke is enough to warrant overturning an individual’s right to legal protection against this kind of invasion of privacy, harassment, and sexual violence.

Further, according to Judge Orozco’s ruling, supplying a written description of the photos’ content instead of posting the photos themselves would fail to adequately capture or sufficiently communicate the level of depravity exhibited by the actual image. Instead, “the public should be permitted to determine the importance or relevance … for itself.” Again, this suggests that the ambiguity attending any likeness (inevitably lacking context) is just as important as (if not more important than) the cold, hard facts. A picture is worth a thousand words, and it’s meaning should lie with the beholder.

Note, however, that the photos’ publication is defended on the grounds that they provide evidence of Hill lacking moral fiber, not proof of the allegations leveled against her. The photograph which includes a staffer depicts a previous relationship that occurred during the campaign — a consensual relationship that was surely unethical, but not illegal, and to which Hill admitted — while the public value of the other photos centers on Hill holding a bong and sporting a questionable tattoo.

The publication of these photos, then, does little else but invite the viewer to pass judgment according to arbitrary standards of decency and decorum that amounts to nothing more than moralizing and slut-shaming. (Consider, for example, commentators’ judgments that the photos are revealing, “bespeaking a kind of hedonism that at least some voters may view as a character defect.”)

But our recognition of this unique kind of harm is precisely why revenge porn laws exist in the first place. Their purpose is to restrict the freedom of bad actors in recording and distributing salacious materials against their victims’ will. The publicizing of nonconsensual pornography weaponizes information by bringing public opinion down on the head of victims and branding them with an unerasable social stigma. Given the limitations to genuine redress, the law must have sufficient teeth to act as a deterrent capable of discouraging other would-be attackers. The law operates with the understanding that there is no putting the genie back in the bottle once a leak occurs.

The language of “revenge porn” is often criticized for focusing our attention on the perpetrator’s mindset as opposed to the damage done to victims. Surely, we shouldn’t concentrate our efforts on divining whether spite was the overwhelming motivation behind a perpetrator choosing to distribute illicit images. What matters is the unique kind of sexual violence that is being threatened. But, in this particular case, the context might prove important. First, the photos were taken without Hill’s knowledge (or consent) and distributed by a jilted and “abusive” ex-husband in the midst of a messy divorce. But the leak’s publication also looks to be the work of a concerted effort by Hill’s political opponents. As Quinta Jurecic of Lawfare notes, this may be the first known instance where a “politically aligned publication has published an explicit photo of an opposition politician for apparent political gain.” In fact, Politico reported that the person responsible for posting the photos used the same platform to publicly advocate for the Republican running for Hill’s vacated seat.

Despite these troubling circumstances, commentators have suggested that Hill simply “needs to take the L and move on.” Anyone who chooses to thrust herself into the public eye sacrifices the right to keep any detail of her private life hidden from view. Everything she does becomes a public concern. Ultimately, ours is a society that prioritizes the community’s right to know over individuals’ right not to disclose, privileges one’s freedom to do rather than others’ right to impede, and chafes much more at government overreach than at the paparazzi’s prying eyes. Still, it seems backwards to conclude those occupying the spotlight are less in need of this protection rather than more.

Justice for All?: William Kelly and Kyle Rittenhouse

photograph of police officer with blurred civilians in the background

Last week, a police officer was fired over the details of an anonymous donation he made. Norfolk Police Lieutenant William Kelly contributed $25 to a legal defense fund for Kenosha shooting suspect Kyle Rittenhouse last September. That donation was accompanied by a message:

“God bless. Thank you for your courage. Keep your head up. You’ve done nothing wrong. Every rank and file police officer supports you. Don’t be discouraged by actions of the political class of law enforcement leadership.”

Kelly’s donation was anonymous and only made public following a security breach of Christian crowdfunding website GiveSendGo when data was shared with and circulated by Distributed Denial of Secrets and later published by The Guardian.

In the wake of his firing, GiveSendGo has started a fundraising campaign for Kelly. Co-founder Heather Wilson argues that “Regardless of how you feel regarding Kyle Rittenhouse, the fact is that Mr. Kelly’s individual rights have been grossly violated.” His donation “wasn’t against the law, but a criminal hacker group and a biased media outlet decided that was enough to make an example of him.”

This particular framing conforms to a broader (misleading) narrative regarding cancel culture’s all-out assault on individual rights. The story is presented by some as the obvious overreach of the progressive thought police. Kelly, these voices claim, is being persecuted merely for holding private, personal opinions that a powerful bunch have deemed distasteful. Woke mob rule has conspired once again to force the hand of another institution to cut ties with a controversial figure or risk being tarred with the same brush. What was once a call for boycott or an urging to deplatform has transformed into something much bigger. This isn’t a mere public shaming; Kelly’s dismissal highlights the serious threat to professional livelihood: an 18-year veteran and the second-highest ranking officer in the Norfolk Police Department lost his job in less than 72 hours.

Given the situation, labor lawyers like Ray Hogge have suggested that the firing was “inappropriate and illegal.” Kelly’s dismissal is a violation of his rights of speech and association. As a free citizen, Kelly is at liberty to support any charitable cause he chooses, regardless of whether city leaders approve. Employers shouldn’t be in the business of picking and choosing the values their employees can espouse. And this should be especially true in the case of a private, off-duty communication between friends.

The trouble is that Mr. Kelly’s rights are not the only rights at issue. His interests must be weighed against the state’s interest in delivering impartial justice for us all. Kelly’s case is more than just a matter of bad optics or a squeamish politician rolling over to avoid backlash from a mob spoiling for a fight. This is a state official countermanding the expressed purpose and obligations of the post he serves a post that sometimes requires the use of deadly force. Kelly’s words give us reason to question whether he can adequately execute the functions of his office.

Even out of uniform, officers have a duty to uphold public image and not engage in activities that might erode respect for the badge. As Police Chief Larry D. Boone made clear,

“A police department cannot do its job when the public loses trust with those whose duty is to serve and protect them. We do not want perceptions of any individual officer to undermine the relations between the Norfolk Police Department and the community.”

The effect Kelly’s position as an officer of the law has on this speech act (even in private as a public citizen) appears inescapable (for discussion see A.G. Holdier’s “Pastor Fritts, the First Amendment, and Public and Private Reason”). His incidental use of his police department email in making the donation helps to highlight the trouble: Lt. Kelly is incapable of speaking on this matter while wearing a different hat. A police officer expressing support for a vigilante (publicly or privately) and suggesting that outlaw is above the law is fundamentally at odds with the sworn duty to protect and serve. It betrays an indifference to the law he is meant to uphold and to the exclusive position that he occupies. It confers legitimacy on some while denying it to others and fails to discourage us from taking the law into our own hands.

But there remains much that needs to be settled. Rittenhouse only stands accused and has pleaded not guilty on the basis of self-defense; the jury is still out. Unfortunately, this fact means that Kelly’s endorsement is more egregious, not less. Choosing to support a suspect before his day in court is a problematic stance for law enforcement to take. The police shouldn’t stand as judge, jury, and executioner. Kelly’s actions are objectionable, then, not because he chose the wrong side in the culture war, but because he chose to take a side at all.

What is the Cultural Cost of Urban Development?

Photograph of the historic city center of Perpignan, France

In the Saint Jacques district of Perpignan, France, a group of Catalan Gypsies (“les gitans”) made a stand last August for the preservation of their deteriorating historic neighborhood.  The city wanted to demolish and replace hundreds of buildings for the sake of the health and safety of these residents, but the residents argued that their cultural connection to the architecture was worth more than the benefit of modern buildings. The city backed down, but there is no reason to believe that the issue is settled. As buildings in cities all over the world begin to show their age, and as municipal governments realize that these picturesque neighborhoods are among their most treasured assets, the challenge of balancing heritage and progress is becoming increasingly relevant. What should cities be doing to preserve their cultural monuments while people are living inside? Continue reading “What is the Cultural Cost of Urban Development?”