The Curious Case of Benjamin Strong.

Discussion in 'Economics' started by morganist, Nov 24, 2012.

  1. sounds like a bad trading plan to me. I'm so boxed in at the moment I can't make or lose money no matter what the market does. At some point, you need to take some risk. Ben doesn't seem to me to be much of a gambler.
     
    #21     Nov 28, 2012
  2. morganist

    morganist Guest

    I meant more should they use another mechanism that does not have the problems the interest rate has.
     
    #22     Nov 28, 2012
  3. and what would that "other mechanism" be?
     
    #23     Nov 28, 2012
  4. morganist

    morganist Guest

    They could use fiscal policy or a tax based income policy. Personally I would use the Current Pension Rebate. I wrote this a few years ago and got asked to meet Vince Cable to discuss it. He is the business Secretary now. The paper is linked below.

    The figures are out of date but the concept is good.

    http://www.morganisteconomics.org.uk/Documents/WhatIsTheCurrentPensionRebate.pdf
     
    #24     Nov 28, 2012
  5. morganist

    morganist Guest

    Depending on peoples spending habits the level of demand will change. Rather than using the interest rate to encourage saving why not use pensions?
     
    #25     Nov 28, 2012
  6. Chausey

    Chausey

    Sorry I got off on something else there. Yes I agree they should use something other than interest rates. Enforce anti-monopoly laws, break up the biggest banks and corporations. The government used to do this, but power got too concentrated and became captive.
     
    #26     Nov 28, 2012
  7. Exactly. Instead the power was consolidated even more acutely since 2008. The biggest I-banks should "strip out" and divest of the many conflicting revenue centers that continue to put depositor's at risk and force the hands of the government to either: continue to bailout the shadow banking system OR enact more complex and bloated legislation to try to enforce regulation of a financial system that is basically un-manageable in its current form.

    Just about every constructive idea that arose during the "crisis" four years ago was ignored because as you put it "power got too concentrated and became captive".
     
    #27     Nov 28, 2012
  8. zdreg

    zdreg

    " Milton Friedman himself is not man enough to pass up 21st century comfort for anything less. "
    the man is not alive.

    " Everything is free market, everything open to being dismantled for something worse. The free market depends on government for a currency decree. After that, this phony debate goes out the window. "

    there is no law of nature that says you have to have a
    central bank eg. fed

    the US grew quite nicely before establishment of fed 1913.
    since then it has been nothing but an engine of inflation, a tool of the politicians. prices are up 8 to 10x since 1946.
     
    #28     Nov 28, 2012
  9. zdreg

    zdreg

    they should have led the banks fail. monopoly was created because the gov't bailed them out.
    wilbur mills and vulture investors, if given the opportunity, would have started new banks and recapitalize old ones.

    the reason it was not done is that the gov't likes big banks because they can tell the big banks whom to lend credit to without nationalizing
    them.
     
    #29     Nov 28, 2012
  10. piezoe

    piezoe

    When you consider the results so far in light of both what they have and are doing, it leads you directly to what they are trying to do. And, in my view, they are, so far, succeeding amazingly well, especially considering the magnitude of the self-inflicted crisis they were faced with. The Fed has been likened to a fire department called to put out a fire they themselves started, and not without considerable justification. At least they are skillfully putting it out.

    They have used a clever and broad range of tools, but they must rely on Congress for help on the fiscal and revenue sides. They are limited by Congress as to what they can and cannot do.

    Bernanke has repeatedly stated that current deficits are not sustainable, but I am confident he realizes that now is not the time to balance the budget. That will have to wait until the economy recovers. And it will!

    It's abundantly clear that the President's Council of Economic Advisers are, in the main, followers of Keynes and I am sure Bernanke is as well. And thank goodness! I cringe every time I hear measures put forth that if adopted would derail the program embarked on by the President, the Treasury and the Fed, and reverse the good progress already made.

    The U.S. must bring its revenues and expenditures into balance, but this must be done wisely using a balanced approach spread out over many years. The two areas where there is the greatest waste and the worst ratios of benefit to cost ought to be concentrated on. These are medicare/medicaid and defense.

    At the same time none of us should remain blind to the serious trampling on the Bill of Rights that has been going on ever since 911. I see this as a far more serious matter then any creeping-in of socialism that many of you seem so fixated on. But that's a subject for another day.
     
    #30     Nov 28, 2012