Edward Lotterman

With Donald Trump’s outbursts amping up attention on the Federal Reserve and markets hanging with bated breath on what Chair Jerome Powell is going to do, arcane monetary policy has moved to center stage.

Yet the issues are more complex than many think. It’s not as simple as headlines about the president’s social media posts on wanting lower interest rates make it seem to be.

Most news stories fail to mention key questions or misunderstand key institutions. So a primer on basic terms of money, banking, central banking and the effects of all these on our economy is useful even if details are sacrificed for brevity.

Start with “money.” What is it really?

Money is anything that fills all three of these common functions:

First it must be a “medium of exchange,” something widely used and commonly accepted to buy and sell things.

Secondly, it must be a trusted “standard of value,” or yardstick, by which we measure and compare the value of goods and services or of physical or financial assets like houses or shares of stock. “Unit of account” is a synonym used by some.

Third, to be money, it must work as a “store of value,” a way of maintaining value produced in one period until spending it later on.

Historically money consisted of precious metals like gold or silver. But belts of small seashells or doughnut-shaped stones also were used. So might be perishables like beaver pelts, cigarettes or bread. For these, see Aleksander Solzhenitzyn’s novel, “One day in the Life of Ivan Denisovich” or downed-RAF pilot R.A. Radford’s 12-page “The Economic Organization of a P.O.W. Camp.” Yes, money is nicknamed “bread” for a reason.

However, pieces of paper with pictures of buildings and heads of state have been acceptable representations of value for several centuries, as have electronic numbers on various media for nearly one. Some such papers once had a legal tie to a quantity of gold or silver. Nowadays most do not, but have value anyway.

“Value” here depends on two common elements for money to be successful: First, the money must be “commonly acceptable.” People must be willing to use it. Secondly, it must be kept “relatively scarce.” The first depends on the second. If any form of money is not kept scarce, it soon will lack common acceptance, and lose relative value.

Now for “banks.” These businesses provide financial intermediation for households and businesses and other financial services. “Intermediation” means that anyone having money now but not wanting to spend it until later need not search out a borrower to add more value to the money. Nor is anyone without money but wanting to spend now forced to find an individual lender. Banks move money from savers to borrowers and back again. They spread and absorb risk and handle bookkeeping details. They also may offer checking accounts, credit cards, electronic transfers and other payment services.

Banking as we know it originated in northern Italy and in the Low Countries several centuries ago. Early ones were rich individuals like Shakespeare’s Merchant of Venice, but more commonly rich families like the Medicis, Fuggers or Rothschilds.

These entities bought and sold goods. Often some trade was with other nations. This might involve sharing fractions of ships or cargoes with others, leading to insurance. They lent money to individuals, businesses, governments and popes. And some did take money from savers and lend it to borrowers, although this was a minor activity for many.

These late medieval “merchant banks” that could do anything gave rise to the more specialized ones we know today.

The ones most of us commonly know that accept deposits, make loans and provide payment services are “commercial banks.”

Those that work with corporations or governments to sell bonds to the public, that carry out the issuance of shares of stock to the public or that organize syndicates of lenders for very large loans to businesses or countries are “investment banks.”

In some countries, banks can do all of the above, including insurance underwriting. The term “universal banking” may be used.

In our nation, commercial and investment banking could be combined until the Glass-Steagall Act of 1932, passed in response to the Wall Street crash in 1929. The bank owned by J.P. Morgan and partners, for example, became investment bank Morgan Stanley and commercial bank J.P. Morgan & Co. But all that was repealed by 60 years later.

Most importantly — on coming up on this past week’s news, there are “central banks.” These “banks for bankers” hold some of the “reserves” of commercial banks. These are the fraction of deposits not lent out. Central banks can make loans to financial institutions temporarily short of liquid funds. They also may handle payments between banks, such as clearing checks.

Sweden and England set up central banks in the 1600s. While we had two 20-year attempts early on, the U.S. did not get a lasting one until the Federal Reserve Act of 1913. That institution underwent major changes in 1935 to produce the system with a Board of Governors that we know today. The point of this, arguably, was to insulate objective monetary policy from subjective politics or investment trends.

This “lender of last resort” function of the central bank protects commercial banks from going broke. That also protects the public since it reduces the chance of losing their deposits in a banking panic. And it can keep temporary bank system problems from torpedoing the economy as a whole, sending it into recession as happened so often in the 1800s.

Without going into detail, understand that a banking system in which some fraction of deposits may be lent out results in an “money supply” that can expand or contract regardless of the quantity of “currency,” paper money or coins, in circulation. This lets capital be mobilized to increase production. Also, by reducing risks of losing savings, households and businesses can conduct their affairs with greater certainty and less fear.

The “money supply” is all of the currency in circulation plus the fraction of bank deposits rapidly accessible to make payments. In the past, especially when banks were more regulated, currency plus checking account balances was one measure of the money supply. Add savings accounts, “certificates of deposit” and “money market mutual funds” and you had additional categories.

These complicated exact definitions of different money supply metrics does not change the fundamental idea that the money supply is currency plus deposits that are liquid and can be used to purchase goods and services or pay obligations.

Decades of booms, panics and busts led painfully to consensus on a central bank. It was a complex system of 12 regional banks rather than one. This allayed fears by some of control by Wall Street and by others of control by Congress or the president.

The preamble to the Federal Reserve Act noted objectives “to furnish an elastic currency,” and “to establish a more effective supervision of banking.” Expanding and contracting our “elastic currency” is what the Fed’s policy making Federal Open Market Committee does. Interest rates are just gradations on a speedometer. The money supply is the amount of fuel being injected into the engine. More on all of this later.

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St. Paul economist and writer Edward Lotterman can be reached at stpaul@edlotterman.com.

By Madyson Fitzgerald, Stateline.org

Self-driving vehicle technology continues to advance, prompting a wave of liability and safety regulations from state lawmakers.

This year, lawmakers in Arizona, Louisiana, Montana, Nevada and the District of Columbia enacted legislation to regulate driverless vehicles, according to a database from the National Conference of State Legislatures.

While much of the legislation aims to update existing law to include new definitions for autonomous vehicles, other measures put rules in place regarding insurance, permitting, licensing and road testing.

In total, lawmakers in 25 states introduced 67 bills related to autonomous vehicles, according to the database. California, Illinois, Massachusetts, New Jersey, New York and Pennsylvania currently have bills under consideration. Alaska, Delaware and Washington have bills that will be carried over into the next legislative session.

Governors vetoed two measures this year. Colorado Democratic Gov. Jared Polis shot down a measure that would have required a driver to be present in any commercial vehicle being operated by an automated driving system.

Virginia Republican Gov. Glenn Youngkin vetoed a measure that would have put rules in place for “high-risk artificial intelligence systems,” but would have excluded “autonomous vehicle technology” from that category.

As of now, there are no vehicles that have achieved full autonomy, according to the Society of Automotive Engineers’ criteria. But several car companies have introduced automated driving features, allowing drivers to take their hands off the wheel.

Tesla is rolling out its Full Self-Driving feature, a system under which a vehicle can drive itself almost anywhere with minimal intervention from the driver. Tesla Autopilot, which the company made available to the public in late 2024, also helps with basic vehicle maneuvering.

And Waymo, the country’s first autonomous ride-hailing service, is currently operating in Atlanta; Austin, Texas; Los Angeles; Phoenix and San Francisco. The robo-taxi company plans to expand to Miami and Washington, D.C., next.

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According to the National Highway Traffic Safety Administration, vehicle safety is the main benefit of driverless cars. With higher levels of automation, there is less room for human error or driver distractions. The new technology also could improve safety for bicyclists and pedestrians, according to the agency.

But driverless cars have been involved in hundreds of accidents over the past few years. Between 2021 and 2024, there were 696 accidents reported that involved a Waymo vehicle, according to an analysis by California-based law firm DiMarco — Araujo — Montevideo.

And last year, the National Highway Traffic Safety Administration began investigating Tesla’s Full Self-Driving system after multiple reports of crashes that occurred in low-visibility conditions.

©2025 States Newsroom. Visit at stateline.org. Distributed by Tribune Content Agency, LLC.

By Amanda Hernández, Stateline.org

For years, state lawmakers have taken the lead on regulating kratom — the controversial herbal supplement used for pain relief, anxiety and opioid withdrawal symptoms. Some states have banned it entirely. Others have passed laws requiring age limits, labeling and lab testing.

At least half of the states and the District of Columbia have enacted some form of regulation on kratom or its components — building a patchwork of policies around a product largely unaddressed by the federal government.

But that may soon change. The U.S. Food and Drug Administration is pushing to ban 7-hydroxymitragynine, or 7-OH — a powerful compound found in small amounts in kratom and sometimes concentrated or synthesized in products sold online, at smoke shops or behind gas station counters.

Federal health officials announced last month that the compound poses serious public health risks and should be classified as a Schedule I controlled substance, alongside heroin and LSD.

The move marks a significant shift in how federal regulators are approaching kratom, which they attempted to ban in 2016. It also has sparked debate about how the change could impact the growing 7-OH industry and its consumers.

This year, at least seven states have considered bills to tighten kratom regulations, including proposals for bans, age restrictions and labeling requirements.

Kratom, which originates from the leaves of a tree native to Southeast Asia, can have a wide range of mental and bodily effects, according to federal officials, addiction medicine specialists and kratom researchers. Reports of fatal kratom overdoses have surfaced in recent years, though kratom is often taken in combination with other substances.

Kratom and 7-OH are distinct products with separate markets, but they are closely connected. 7-OH is a semi-synthetic compound derived from kratom and only emerged on the market in late 2023, while kratom itself has been available for decades.

Leading kratom researchers also say more research is needed to fully understand the long-term effects of using both substances.

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“There’s much we don’t know, unfortunately, on all sides,” said Christopher R. McCurdy, a professor of medicinal chemistry at the University of Florida. McCurdy is a trained pharmacist and has studied kratom for more than 20 years.

Research suggests kratom may help with opioid withdrawal and doesn’t seem to cause severe withdrawal on its own. Smaller amounts seem to act as a stimulant, while larger doses may have sedative, opioidlike effects. Very little is known about the risks of long-term use in humans, according to McCurdy.

As for 7-OH, it shows potential for treating pain, but it hasn’t been studied in humans, and it may carry a high risk of addiction. Researchers don’t yet understand how much is safe to take or how often it should be used, McCurdy told Stateline.

While some leading kratom experts agree that kratom and 7-OH should be regulated, they caution that placing 7-OH under a strict Schedule I classification would make it much harder to study — and argue it should instead be classified as Schedule II like some other opioids.

A federal survey from 2023 estimated that about 1.6 million Americans age 12 and older used kratom in the year before the study. The American Kratom Association, a national industry lobbying group, estimated in 2021 that between 11 million and 16 million Americans safely consume kratom products each year.

Since gaining popularity in recent years, 7-OH has appeared in a growing number of products. Some researchers and addiction medicine specialists say many consumers, especially those new to kratom, sometimes don’t understand the difference between products.

“It’s a pure opioid that’s available without a prescription, so it’s akin to having morphine or oxycodone for sale at a smoke shop or a gas station,” McCurdy said. “This is a public health crisis waiting to happen.”

Federal crackdown targets 7-OH, not kratom

In late July, the U.S. Department of Health and Human Services recommended that the federal Drug Enforcement Administration place 7-OH in Schedule I, citing a high potential for abuse. The classification would not apply to kratom leaves or powders with naturally occurring 7-OH.

“We’re not targeting the kratom leaf or ground-up kratom,” FDA Commissioner Marty Makary said at a news conference. “We are targeting a concentrated synthetic byproduct that is an opioid.”

Makary acknowledged that there isn’t enough research or data to fully understand how widespread 7-OH’s use or impact may be. Still, he said the Trump administration wants to be “aggressive and proactive” in addressing the issue before it grows into a larger public health problem.

While only small amounts of 7-OH occur naturally in the kratom plant, federal officials have raised concerns about U.S. products containing synthetic or concentrated forms of the compound because it’s more potent than morphine and primarily responsible for kratom’s opioidlike effects.

The FDA’s recommendation to schedule 7-OH will now go to the DEA, which oversees the final steps of the process — including issuing a formal proposal and opening a public comment period.

If finalized, the rule could affect both companies selling enhanced kratom products and consumers in states where those products are currently legal.

The DEA backed off scheduling kratom compounds in 2016 after widespread public opposition.

Kirsten Smith, an assistant professor of psychiatry and behavioral sciences at Johns Hopkins University who is studying kratom’s effects in humans, said she was surprised by the FDA’s push to schedule 7-OH.

“We don’t really have a public health signal of a lot of adverse events for either kratom or for 7-OH at this time,” she told Stateline. “I was, frankly, always surprised that kratom was pushed toward scheduling at an earlier time point. … I don’t know that we have data to support scheduling even now.”

Still, some advocacy groups, including the Holistic Alternative Recovery Trust, argue the push to schedule 7-OH is driven more by corporate interests than public health, suggesting the kratom industry is trying to sideline competition from 7-OH products.

“We think that this is just happening because of the legacy kratom manufacturers losing market share and wanting to gin up a crisis with this,” said Jeff Smith, the national policy director for the group, who said he has used 7-OH for sleep and pain management.

While his organization supports regulation and safe consumption, members worry the federal government’s move could drive people to riskier substances or push the market underground.

“It’s made a profound difference in my life,” Smith said. “We think it would be tragic to cut it off based on such a paucity of data when there’s so much potential for this product to help people.”

Public health concerns

Federal health officials say a key concern is the growing use of kratom and 7-OH products among teens and young adults.

Some officials and addiction medicine specialists have pointed out that these products often come in flavors and packaging designed to appeal to younger buyers, with few controls over where or how they’re sold. In some states without clear regulations, kratom and 7-OH products are available at gas stations or online, sometimes without any age verification.

“Whenever you go into a gas station and even though it’s behind the glass, it’s kind of eye level, and it has all of these bright colors — it has all of these things that really attract the visual of a kiddo,” said Socorro Green, a prevention specialist with Youth180, a nonprofit focused on youth substance use prevention in Dallas.

Green added that kratom and 7-OH products may be even more accessible to young people in rural communities, where gas stations and convenience stores are often among the few available retailers.

Some researchers and experts say that certain products may not clearly or accurately disclose their 7-OH content and are sometimes marketed or mistaken for traditional kratom.

Some cities, counties and states have responded by banning kratom or raising the minimum purchase age to 18 or 21. But in many areas, enforcement remains inconsistent, and some addiction specialists say clearer federal and state guidance is needed — especially as more people are using kratom and 7-OH to manage pain, anxiety or withdrawal symptoms on their own.

“There needs to be some kind of oversight, including some way of maybe helping to ensure that people know what they’re getting,” said Terrence Walton, the executive director and chief executive officer of NAADAC, the Association for Addiction Professionals.

State regulations

At least seven states have considered or enacted legislation this year related to kratom — ranging from age restrictions and labeling requirements to outright bans.

In New York, lawmakers passed two bills: one requiring warning labels and prohibiting kratom products from being labeled as “all natural,” and another raising the minimum purchase age to 21. Neither has been sent to the governor.

In Colorado, a new measure, which was signed into law in May, prohibits kratom from being sold in forms that resemble candy or appeal to children, increases labeling requirements, limits concentrations of 7-OH, and bans the manufacture and distribution of synthetic or semi-synthetic kratom.

In Mississippi, a new law that took effect in July raised the minimum purchase age for kratom to 21. It also bans synthetic kratom extracts and products with high concentrations of 7-OH. Lawmakers in Montana and Texas introduced similar legislation this year, but neither proposal advanced.

Louisiana is the latest state to enact a kratom ban, which took effect Aug. 1. Meanwhile, in July, Rhode Island became the first state to reverse its ban. The new law establishes a regulatory framework for the manufacturing, sale and distribution of kratom products, set to take effect in April 2026.

As of this year, Washington, D.C., and seven states — Alabama, Arkansas, Indiana, Louisiana, Rhode Island (until April 2026), Vermont and Wisconsin — have banned kratom. At least half of U.S. states now regulate kratom or its components in some way.

©2025 States Newsroom. Visit at stateline.org. Distributed by Tribune Content Agency, LLC.

By Madison Czopek, KFF Health News

For parents of school-aged children, the fall to-do list can seem ever-growing. Buy school supplies. Fill out endless school forms. Block off parent-teacher nights. Do the kids’ tennis shoes still fit?

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Somewhere, at some point, you might remember flu shots. Get your flu shot. Get their flu shots. Or should you? Can you? Is that still a thing?

Amid political chatter about vaccines and the government entities that oversee them, it’s understandable to wonder where all this leaves the 2025-26 flu vaccine.

In short: Yes, the flu shot is still a thing. And doctors we spoke to said they recommend you get your flu shot this year.

Here are some answers to common questions:

Q: I heard the Trump administration could be changing vaccine recommendations. Does that apply to the flu vaccine?

There have been no substantial changes to the federal government’s flu vaccine recommendation: The Centers for Disease Control and Prevention still says that people 6 months old and up should get an annual flu vaccine.

That means most insurers will cover it, and it should soon be widely available.

Health and Human Services Secretary Robert F. Kennedy Jr., who has opposed vaccines, agreed that most people should get the flu vaccine. He followed a recommendation from the board that advises the federal government on vaccine policy; Kennedy replaced the members with his own.

The panel voted against recommending multidose flu shots that contained the preservative thimerosal, but the preservative had already been removed from most vaccines, including most flu shots.

Q: Who should not get the flu shot?

Doctors acknowledged there are always exceptions to broad guidance. For example, people with severe allergies to flu vaccine components should not get vaccines that contain those components.

You should discuss your health situation with your physician for personalized guidance.

Q: Is this season’s flu shot different from last season’s?

Yes. The flu shot was updated for the upcoming flu season, but the changes weren’t drastic. Like last year’s flu shot, this year’s vaccine is known as a three-component or trivalent vaccine that protects against three influenza viruses — two influenza A viruses and one influenza B virus.

This season’s vaccine was altered to target a specific strain of the influenza A/H3N2 virus expected to circulate this season, said Ryan Maves, a professor of medicine at Wake Forest University and a member of the Infectious Diseases Society of America. Those changes align with what the World Health Organization has recommended.

Q: When is the best time to get vaccinated?

September, October, or early November. This allows your body time to build up its protective antibodies as flu season begins and ensures your protection doesn’t wane before it ends.

In the U.S., influenza infection typically peaks in February, so you want to make sure you’re vaccinated and your protection is still strong through February and into March, said William Schaffner, a professor of infectious diseases at Vanderbilt University Medical Center.

Q: Is this season’s flu vaccine guaranteed to protect against the influenza strain that’s circulating?

Guarantee all protection? No.

Reduce risk of death? Yes.

Similar to the COVID-19 vaccine, flu vaccines are best at “protecting us from the most severe consequences of influenza,” Schaffner said. That means the flu vaccine is most effective at keeping people out of the hospital or the intensive care unit and keeping people from dying.

“A flu vaccine may not guarantee perfect protection against the flu, but skipping your flu shot simply guarantees you’ll have no protection at all,” said Benjamin Lee, a pediatric infectious diseases physician at the University of Vermont Children’s Hospital and an associate professor at the University of Vermont Larner College of Medicine.

Q: Will the flu shot be readily available this year?

All signs point to yes.

The FDA passed its formula recommendations to vaccine manufacturers March 13 — early enough that the agency expected there would be “ an adequate and diverse supply.” The people and places that administer flu shots should have them soon, typically beginning in September, said Flor Muñoz, a Baylor College of Medicine associate professor of pediatrics and infectious diseases.

Q: I heard Kennedy canceled $500 million in funding for vaccine development. Could this affect future flu vaccines?

Kennedy announced the cancellation of funding for mRNA vaccine development. Some companies have been researching combined mRNA flu and COVID shots, but there are currently no approved mRNA flu vaccines.

Still, experts said the federal government’s changes — funding cuts, vaccine committee purges, deviations from existing procedures — are increasing uncertainty.

©2025 KFF Health News. Distributed by Tribune Content Agency, LLC.