The article argues that recent executive overreach and politicization have severely undermined established norms of U.S. civil-military relations. To restore professional standards, the incoming Congress must actively exercise its oversight powers, moving beyond mere criticism to demanding transparency in defense policy and personnel decisions. Key reforms include enforcing meritocratic promotion processes, requiring documented justification for senior officer removals, and preventing the partisan use of the military. These actions are crucial for bolstering public trust and ensuring the military remains a nonpartisan instrument of civilian control.
Easing Liquidity Rules Won’t Work If the Fed Keeps Paying Banks to Hold Reserves
English Summary
The article argues that simply easing restrictive liquidity rules, such as the Liquidity Coverage Ratio (LCR), will fail to boost lending because the Federal Reserve's Interest on Reserves (IOR) program creates a powerful incentive for banks to hoard reserves. IOR provides a competitive, risk-free return, removing the opportunity cost of holding cash and thus disincentivizing banks from lending out excess liquidity. For genuine reform, the author contends that policy must be coordinated: regulators must ease rules, the Fed must shrink its balance sheet, and Congress must revoke the Fed's authority to pay interest on reserves. Otherwise, the IOR mechanism will continue to distort the financial sector and suppress credit creation.
中文摘要
本文主張，僅僅放寬限制性的流動性規定，例如流動性覆蓋比率（LCR），無法刺激貸款增長，因為聯準會的準備金利率（IOR）計畫為銀行創造了囤積準備金的強大誘因。IOR提供了一個具競爭性且無風險的回報，消除了持有現金的機會成本，從而削弱了銀行將過剩流動性貸出的動機。作者認為，若要實現真正的改革，政策必須協調：監管機構必須放寬規定，聯準會必須縮減其資產負債表，而國會必須取消聯準會支付準備金利息的權力。否則，IOR機制將持續扭曲金融部門並抑制信貸創造。
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