The Fed Should Create a Hurricane Crisis Facility

Published at Financial Times Alphaville

I had a piece ready to go tomorrow covering the shocking story of the Federal Reserve nearly abandoning its 13(3) emergency lending authority in 1967. But I’ve moved it to next Tuesday because of the urgency of the moment. Obviously it's very unlikely for the Federal Reserve to jump in the middle of the Hurricane Milton disaster response but the situation is genuinely so dire that I am hoping pushing them right at this moment could lead them to seriously think about it. And in the bigger picture, criticism for their failure now makes it more possible in the future. Meanwhile the 30,000 pages of FOIAed Federal Reserve Board Minutes will come right after 

Hurricane Helene only dissipated September 29th, yet not even two weeks later Hurricane Milton is set to make landfall today. Climate scientists have been warning for years that we were set to experience increasingly extreme weather as earth’s average temperature rose. As of this writing Milton may be the first “category 6” hurricane, a category that has not yet even become generally accepted as a possibility. We have not really reckoned with the full scale of Helene’s wreckage before having to face Milton’s destructiveness

Meanwhile budgetary fights have left FEMA with only stopgap funding that they have already run through by Hurricane Helene along with four other natural disasters that have happened in the last few weeks alone. Put simply, the funding to respond to Milton is not currently in place and House Speaker Mike Johnson says he will not call an emergency session of congress for more FEMA funding. Since congress is set to reconvene after the election, this could mean a new FEMA appropriations bill could take a month or more to be passed. Regardless of the final outcome in this particular situation, it's clearly far from ideal for responses to increasingly disastrous hurricanes to live or die by ever more fickle vicissitudes of short term congressional appropriations negotiations. 

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