Floor Statement of Senator Chuck Grassley

Nomination of Janet Yellen to be Fed Chairman

Delivered Monday, Jan. 6, 2014

Over the past five years the Federal Reserve has pursued unconventional and unprecedented monetary policy.  As vice chair of the Fed, Janet Yellen has been a strong proponent of these policies.  As chair, she is likely to continue these same easy money policies with the same, if not more, vigor than her predecessor.

I have deep concerns about the long-term effects of pursuing these policies.  Historical evidence suggests that failing to rein in easy money policies on a timely basis risks fueling an economic bubble or even hyperinflation.

It is true that one of the lessons learned from the Great Depression was that an overly tight monetary policy in a recession risks economically debilitating deflation.  Thus, understandably, when the recession hit in 2008 the Fed sought to avoid the mistakes of the past by lowering interest rates to encourage investment.  However, this expansionary monetary policy cannot continue into perpetuity without causing real and lasting damage to our economy.

Just as we should not repeat the mistakes of the Great Depression, we need to be careful not to repeat the mistakes that fueled our recent recession.  Let us not forget that our current economic stagnation began with the bursting of the housing bubble in late 2007.  A housing bubble fueled by rampant speculation that was driven, in part, by historically low interest rates maintained by the Fed between 2001 and 2004.

Yet, once again we see the Fed embarking on a policy of sustained historically low interest rates.  The Fed has now maintained the Federal Funds rate essentially at zero for over five years.  What may be the future consequences of this policy?  What new bubble will arise?  At this point, I do not think anyone can answer these questions definitively.  But no one can deny that the risks are real and could be devastating.

The Fed though has not just sought to maintain record low interest rates.  With its traditional monetary tool tapped out, the Fed has turned to a less conventional and more aggressive program in an attempt to jumpstart our economy and lower unemployment.

The Fed is now engaged in an open-ended policy it has termed quantitative easing.  Essentially, this is a fancy way to say the Fed is flooding the economy with trillions of dollars through large purchases of mortgage-backed securities and longer-term Treasury securities.  As a result of this program, the Fed has seen its balance sheet more than quadruple from around $800 billion to nearly $4 trillion.  Vice Chairman Yellen has not presented a plan to Congress on how the Fed plans to deal with this issue.

While I welcome the news from the Feds' December meeting that it intends to reduce the monthly purchases, I fear it may already be in too deep.  It remains unclear how the Fed will be able to go about unwinding its nearly $4 trillion balance sheet without spooking investors.

The stock market has become addicted to the Fed's easy money policies.  This has led one notable investment advisor to question whether the Fed will ever be able to end the quantitative easing program.

While the stock market has become addicted to easy money, the benefit to Main Street has been questionable at best. Unemployment remains high, bank lending remains tight, and savers discouraged.

While the benefits to Main Street remain unnoticeable, Main Street most certainly will feel the pain should the Fed carry on its easy money policy for too long.

For an example of what Main Street could be in store for, one need look no further than the late 1970s and early 1980s.  The easy money policies of the 1970s intended to spur employment resulted in stagflation, a period of hyperinflation and high unemployment.  During this period unemployment topped 10 percent while inflation exceeded 14 percent.

The experience of the late 1970s and early 1980s made it clear that once you let the inflation genie out of the bottle it is very difficult to stamp it out.   After suffering years of stagflation, Americans were then subject to the pain of unprecedented interest rates as high as 20 percent just to get hyperinflation back under control.

Statements by Ms. Yellen indicate she would be open to inflation exceeding the fed target of 2 percent as a means to achieve full employment.   While achieving full employment may be a noble goal, the Fed has a dismal record at being able to produce sustainable job creation through expansionary monetary policy.

While inflation may aid employment in the very short term, our experience with stagflation in the 1970s shows this tradeoff falls apart quickly as people's expectations change.  Sustainable job growth comes not from inflation, but price stability that promotes long-run economic growth.  We need a chairman focused on a strong dollar and low inflation.

My concerns about the Fed's easy money policies and inflation led me to vote against Chairman Bernanke for his second term at the Fed.   Because it appears that Ms. Yellen will continue to pursue these misguided policies, I cannot in good conscience vote in favor of her confirmation.

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Winter Reading Program at the Rock Island Public Library, Jan. 21 to March 1

Rock Island, IL: Knights, princesses, dragons, kings, and queens are invited to storm the reading castle with the Midwinter Knights' Read winter reading program from the Rock Island Public Library. The campaign to promote winter reading for fun and relaxation runs from Tuesday, Jan. 21 to Saturday, March 1 at all library locations.

 

Reading challenges are available for both children and adult readers. Children from pre-school to 6^th grades can pick up a Midwinter Knights' Read reading log, with the goal to read either 12 books or for three hours of accumulated time. As an incentive for registering, children can pick up a pencil, bookmark and sticker with the reading log. Children who complete their reading goal will earn a book and bag.

To help get kids in the right fairy-tale mood, the library will host a Winter Reading party kick-off party at 2:00 pm on Saturday, Jan. 18 at the Rock Island Main Library, 401 19th Street. The Knights & Dragons - It's "Joust" a Party event will include games, fun, crafts and more for children of all ages.

Other medieval themed family events include a Castles & Knights Storytime at 11:00 am, also on Jan. 18 at the Main Library, free children's movies at 1:00 pm on Friday, Jan. 17 and Feb. 14 at at the Rock Island Main Library, and dragon-themed storytimes during the week of Jan. 20 at the 30/31, Southwest and Main Library branches.

Adults ages 18 and up can participate in the reading program by completing one entry form for each adult book, eBook or audiobook completed during the Jan. 21 to March 1 challenge period. Only books read between the contest period should be counted. Entries will go into a random drawing for the grand prize of an Amazon Kindle Fire HD, or secondary prizes of gift cards and passes to restaurants, merchants and attractions.

Children's reading logs and adult reading challenge entries are due back to the library by 5:00 pm on Saturday, March 1. Forms will be available starting Tuesday, Jan. 21 at all Rock Island Library locations.

The library will be closed Monday, Jan. 20 for a staff in-service training day.

Winter reading prizes are sponsored by the Friends of the Rock Island Public Library.

For more upcoming library events, visit the library website at www.rockislandlibrary.org, follow Rock Island Library on Facebook or call 309-732-7323.

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Leading Unified Communications Provider Offer Solutions to Enhance Customer Profitability

DAVENPORT, IA - December 31st, 2013 - Midland Communications, a leading provider of unified communications, announced a new program today that enables businesses to migrate from hardware-based technology to cloud-based services. This transition has been accelerated largely due to the maturity of cloud-based services, and their ability to deliver a dramatic competitive advantage across several industries. The impetus for Midland Communications' initiative lies in advancements that have made this technology cost-effective for the majority of small to medium-sized businesses (SMBs). Midland Communications' cloud-based services enhance their customers' mobility, security and strategic IT capabilities.
The primary reasons that many SMBs look into cloud-based services are for the inherent benefits of mobility, freedom and workforce flexibility. Midland Communications has been able to eliminate the notion of being "chained" to on premise equipment such as servers or traditional desktops. The average employee is in-and-out of the office and can hardly afford to spend time making additional trips to the office to retrieve files, access certain programs and collaborate with team members. According to Global Workplace Analytics, "Regular telecommuting grew by 79.7% between 2005 and 2012...".  It's no secret that the days of the 9 to 5 business are long gone and the increase in the resulting mobile workforce has created a need for employees to stay connected with company data while having the freedom to be away from the office. Virtual workspaces now allows for complete collaboration across various departments regardless of location or hardware.
Further flexibility can be found in the Bring-Your-Own-Device (BYOD) environment. Employees can access company data across multiple devices, operating systems and much more. For example, salespeople can create sales presentations at the office, drive out to an appointment, and make last minute revisions on their iPad while accessing all of the programs, tools and files that are hosted in the cloud. Businesses that can operate on-the-fly have a huge advantage over their competitors.  This is why so many organizations are moving towards this type of technology.
Additionally, cloud-based services have enhanced security features as well. SMBs should make certain that providers deliver enterprise-grade services such as virus, malware, spyware and rogue employee protection. Customers should also expect 24x7x365 network monitoring and system support so they can always be confident that their data is safe and accessible. Midland Communications offers solutions with security measures in place that are on par with military-grade data encryption and have built-in redundancy across the network.
Lastly, the growth in cloud-based services has enabled providers like Midland Communications to take over the day-to-day management of technology so the customer can concentrate on growing their business. Most business owners have recognized the benefits associated with getting their staff "working ON the business" rather than "working IN it."
"Many cloud-services have evolved from being a cheap, low-cost alternative to becoming more secure than the majority of on-premise solutions," stated Jason Smith, Vice President of Midland Communications. "There are significant advantages of moving from on-premise equipment to the cloud and it is our role to educate our customers as well as make it an easy transition."

ABOUT MIDLAND COMMUNICATIONS

Midland Communications began more than 60 years ago in 1946 as the Worldwide Marketing Arm of Victor-Animagraph Projectors. In 1977 a communications division was formed due to a partnership with NEC America. Today, As a distributor of NEC America, for 33 years, Midland Communications has a customer base of more than 3,000 satisfied customers that include general businesses, government agencies, Universities, colleges, hospitals, and hotels.
Midland provides a wide range of communication services including VOIP, PBX and key systems, Wide Area and Local Area networking, computers, Computer integration, voice mail, CCIS, and video conferencing and paging systems. Our philosophy is simple, provide quality products at a fair price, backed by an average emergency response time of twenty minutes, and the best service in the industry. For more information on Midland Communications, call (563) 326-1237 or visit www.midlandcom.com.

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Critical State Services Continue; Illinois National Guard Activated to Join Other State Emergency Responders

CHICAGO - Governor Pat Quinn today was joined by key state emergency officials to provide a comprehensive update on the state's response to the historic winter storm and freeze. As all critical and emergency state services continue, the Governor has also activated the Illinois National Guard to help emergency crews across the state provide assistance during the bitter cold and dangerous weather conditions, which have included a hazardous combination of black ice and snow drifts.

Since last week, the state has deployed nearly 3,700 employees and 1,755 trucks from the Illinois Department of Transportation (IDOT) statewide to address the winter weather on state routes, and 200 staff and 182 snow plows from the Illinois Tollway. The Tollway has doubled the number of Zero Weather Road Patrols to assist customers stranded in their cars during the severe weather. Additionally, Conservation Police Officers in snowmobiles, all-terrain vehicles and four-wheel-drive trucks are assisting stranded motorists throughout the state and helping find missing persons.

"The state of Illinois has mobilized all resources to keep residents safe while continuing to provide critical state services," Governor Quinn said. "We are facing a dangerous combination of low temperatures, black ice and snow drifts."

"I want to recognize the heroism of our state's first-responders and emergency personnel who have been working throughout the night and day to rescue motorists and provide critical services and assistance in some of the most difficult conditions imaginable," the Governor said.

Update

The Governor has been monitoring weather conditions hour by hour and has directed the state's agencies to take a number of steps in response to the heavy snow and severe cold gripping Illinois.

Yesterday, the Governor activated the State Emergency Operations Center in Springfield to coordinate the state's response to the storm. Representatives from critical safety agencies are staffing the center 24 hours a day throughout the duration of the storm and dangerously low temperatures. As a dangerous combination of black ice and snow drifts developed overnight, Governor Quinn issued a statewide disaster declaration, which activates the state's emergency operations plan and allowed him to activate the Illinois National Guard to help state and local emergency responders with an increasing volume of calls for assistance. As conditions continued to worsen, the Governor implemented the State's Continuity of Operations/Continuity of Government Plans earlier this morning to ensure continued delivery of critical state response services during the severe winter weather conditions while protecting the state's workforce.

The Governor has also opened the state's more than 100 warming centers, including Illinois Department of Human Services offices throughout the state, which are open Monday through Friday from 8:30 a.m. to 5 p.m., or the Illinois Tollway Oases, which are open 24 hours a day. To find a warming center, call (800) 843-6154 or visit keepwarm.illinois.gov.

Heroic Emergency Responders

Stories of heroism by rescuers continue to emerge as emergency responders work around the clock to assist those impacted by the extreme weather.

Personnel from the Illinois National Guard field maintenance shop in Mattoon coordinated with Illinois State Police troopers and Illinois Department of Transportation snow plow crews to assist motorists in approximately 375 vehicles backed up on I-70 and I-57 north of Effingham Sunday evening. The backup was the result of several vehicles and semi-trucks that were stuck in snow drifts, making it impossible for snow plows to clear the route for the cars to proceed. Illinois National Guard personnel used a wrecker to pull the stranded vehicles and trucks from the road, which allowed IDOT crews to clear the road and rescue hundreds of passengers.

"The men and women of the Illinois National Guard are again demonstrating their commitment to the safety and security of Illinois citizens," Brig. Gen. Daniel M. Krumrei, the Adjutant General of the Illinois National Guard, said. "We train extensively throughout the year to be ready and on the scene to help our neighbors at a moment's notice.  Within two hours of activation, our Soldiers navigated dangerous road conditions in sub-zero temperatures to rescue stranded motorists."

Conservation Police Officer Trent Reeves rescued seven people and two pets that were trapped by snow drifts along Route 47 north of Mahomet. Emergency vehicles could not reach the people, so Officer Reeves traveled by snowmobile and on foot to rescue the stranded individuals and deliver them to nearby emergency vehicles. All of those rescued, including the pets, are fine. Officer Jim Mayes assisted with the rescue, and himself used his truck to rescue six individuals who were stranded on Interstate 74 in east central Illinois.

State officials are advising people to stay safe and take the proper precautions during this weather emergency.

"With the freezing temperatures, black ice is a major concern," Illinois Transportation Secretary Ann L. Schneider said. "Black ice forms on roads that appear clear and the unseen ice can be treacherous. We encourage motorists, if they must travel, to take it slow when approaching intersections, off-ramps, bridges and shady areas - all are prone to black ice. Motorists should use extreme caution, buckle up, avoid distractions and check www.gettingaroundillinois.com for the latest winter road conditions and road closures."

"If you must drive in these dangerous conditions, be sure to stock your vehicle with emergency supplies, such as bottled water, snack foods, a flashlight, blankets, extra warm clothing, gloves, boots and other winter weather items," Illinois Emergency Management Agency Director Jonathon Monken said. "You need to be ready to stay safe and warm if you are stranded along the road for several hours, which is a very real possibility during the current weather conditions."

"Facing such extreme conditions, the Tollway is urging its customers to avoid driving if at all possible," Illinois Tollway Executive Director Kristi Lafleur said. "For those who must travel, we are asking that you take proper precautions for dangerously cold temperatures and allow extra time for your trips."

The Illinois Department of Public Health and the Office of the Illinois State Fire Marshal caution residents about the dangers of carbon monoxide poisoning. Carbon monoxide is produced whenever fuel such as gas, oil, kerosene, wood or charcoal is burned.  If appliances are not working properly or are used incorrectly, dangerous levels of carbon monoxide can result. Symptoms may resemble winter flu or food poisoning, particularly in children, and include headaches, dizziness, nausea, and lethargy. Higher levels of exposure can cause fainting, marked confusion and collapse. If exposure continues, death can result. If your carbon monoxide detector alarm sounds, call 911 and leave the area immediately. Affected individuals should be led to fresh air.

To prevent carbon monoxide poisoning, do not use a gas oven to heat your home, even for a short time; do not burn anything in a stove or fireplace that is not vented; do not use gasoline-powered engines in your house, garage or other enclosed spaces; and do not use a charcoal grill, camping stove or Sterno-type fuel for cooking indoors, even in a fireplace.

The Department of Public Health also reminds people to reduce the chance of frostbite or hypothermia by staying dry and wearing several layers of lightweight clothing; covering your head; wearing mittens rather than fingered gloves; wearing warm leg coverings and heavy socks or two pairs of lightweight socks; and covering your ears and lower face.

The Illinois Department of Agriculture encourages pet-owners to keep their pets indoors or ensure they have a warm shelter area with unfrozen food and water. To protect people's pets, they also encourage everyone to use pet-friendly salt when clearing sidewalks and driveways.

More information about Winter Storm Preparedness is available from Ready.Illinois.gov.

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