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Welcome to the "Wolf Creek Pass" School of Monetary Policy

I don’t know if you folks remember that hit ditty: a humorous tune about two truckers attempting to manhandle an out-of-control 1948 Peterbilt down the “other side” of Wolf Creek Pass – a death-taunting section of U.S. Highway 160 where the elevation drops a hefty 5,000 feet in a relatively short distance.

The song’s two characters – a truck driver named Earl and his brother, who’s his partner as well as the song’s narrator – are taking a flatbed load of chickens on a speedy trip down this winding, two-lane Colorado highway. After the narrator gives Earl the above-mentioned warning, the ancient semi’s brakes fail.

From there on down, the narrator tells us that the brothers’ trip “just wasn’t real pretty.” The truck careened around hairpins and switchbacks, and then raced at an uncontrolled 110 mph toward a tunnel with “clearance to the 12-foot line” – with chicken crates sadly “stacked to 13-9.”

The drivers and the runaway Peterbilt “went down and around and around and down ’til we run outta ground at the edge of town… and bashed into the side of the feed store – in downtown Pagosa Springs.”

Believe it or not, I started thinking about this funny old country tune the other night – right after I’d read a piece about QE3 and the U.S. Federal Reserve.

As zany as it first sounds, the parallels are striking.

  • Featured Story

    Wealthy Congressmen Don't Feel Your Pain

    When you're as wealthy and comfortable as members of Congress are, it's tough to identify with people who are barely making ends meet.

    The median net worth of Congress soared 15% from 2004 to 2010, with the average Congressman worth $913,000. Meanwhile, the median net worth of all Americans fell 8% over the same period to $100,000.

    Nearly half of the members are millionaires.

    Even America's richest 10% haven't fared as well as the typical member of Congress - their net worth in that time span has remained about even.

    "There's always a concern that they can't truly understand or relate to the hardships that their constituents feel - that rich people just don't get it," Sheila Krumholz, executive director of the Center for Responsive Politics, told The New York Times.

    In fact, the trend of Congress members growing disproportionately wealthy stretches more than two decades.

    According to a Washington Post study of Congressional financial disclosures, the median net worth of a member of the House - excluding home equity - more than doubled between 1984 and 2009, from $280,000 to $725,000. Meanwhile, the comparable wealth of the average American fell from $20,600 to $20,500.

    The Post excluded home equity because it is one of several items not reported, or underreported, in congressional disclosure forms.

    For example, members need only disclose a maximum of $1 million of assets belonging to a spouse, regardless of how much that spouse may be worth.

    Take John Kerry. His wife, Teresa Heinz, inherited the vast Heinz family fortune estimated at about $500 million. That figure never appears higher than $1 million on his disclosure form.

    And members don't have to disclose at all the value of their government retirement accounts and any personal property not considered an investment, such as automobiles and artwork.

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  • 111th congress

  • The Five Most Idiotic Things Congress Did This Week As life for the average American has gotten harder and harder, elected officials in Washington have done little to help.

    Congress wastes much of its time on political posturing and bickering. And in those rare instances when our representatives actually do something, they usually make a mess if it.

    It's no wonder the job approval polls for Congress have fallen into single digits.

    Here at Money Morning we've pointed out many of Washington's worst offenses over the years, but the truth is that the nonsense in our nation's capital never really stops - and not all of it makes the evening news.

    To erase any doubt, here are five ridiculous things that happened in Washington just this week:

    Any Excuse for a Fight: For the past week, Congress has been arguing about extending into 2012 the payroll tax cuts, which put about $1,000 into the pocket of the average worker in this year.

    Most Republicans and Democrats alike agree it's a good idea. But instead of simply approving it, both sides are using it as a political pawn. House Republicans have tossed approval of the controversial Keystone XL pipeline into their version of the bill, which many Democrats oppose for environmental reasons. And Senate Democrats, with urging from U.S. President Barack Obama, have added a surtax on millionaires to pay for the payroll tax cut, which Republicans oppose.

    As if to prove just how incredibly dysfunctional Congress can be, Senate Majority Leader Harry Reid, D-NV, on Wednesday threw a routine government spending approval package into the mix to try to force Republicans to negotiate on the payroll tax issue. Failure to approve that bill would force a government shutdown - the same crass tactic Republicans used over the summer during the debt-ceiling crisis.

    Drop it in the Memory Hole: On Monday Debbie Wasserman Schultz, D-FL, insisted during an appearance on Fox News that the nation's unemployment rate had not risen since President Obama has been in the White House.

    The U.S. unemployment rate was 7.8% in January of 2009, when President Obama took office, and 8.2% in February 2009, his first full month in office. Unemployment peaked at 10.1% in October 2009, and hovered above 9% for most of 2010 and 2011. It fell to 8.6% last month.

    Wasserman Schultz is no backbencher, either - she's also chair of the Democratic National Committee.

    Who Cares if You Have to Pay More for Gas? Most Americans favor getting tough with Iran, but not many want to pay more to gas up their cars - not that House lawmakers are worried about that. The Iran Threat Reductions Act, which the House passed on Wednesday, is intended to strengthen sanctions against Iran, but one nasty side effect could be a disruption of the oil markets. Iran is the world's fourth-largest producer of oil.

    "This may cause short term difficulties for the world's oil market, and it may rankle some of our allies, but it is necessary, because stopping Iran's nuclear program is of paramount strategic importance, and we're running out of time," said Rep. Howard Berman, D-CA.

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