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Forum Post: The Appeal of “End the Fed” By Arthur MacEwan

Posted 1 year ago on Aug. 27, 2012, 7:36 a.m. EST by flip (6866)
This content is user submitted and not an official statement

Given the Fed’s history of frequently sacrificing employment in the name of preventing inflation, its support of banks and the role of bankers in affecting its operations, its failure to prevent the recent financial crisis, its role in bailing out the banks and the bankers, and its failure to act strongly enough in the current period, there is a good deal of animosity towards the country’s central bank. Ron Paul and others have been able to use this popular animosity to promote a broader agenda of reducing government regulation of the economy. Their call to “end the Fed” is one more effort to push the idea that the economy works best when the government works least. One would think that this is a pretty hard line to swallow in light of recent experience, when the “light hand” of government regulation was a key element in generating our current economic malaise. Yet it seems to have appeal.

In advocating an end to the Fed, Paul has called for a return to the gold standard as a means to regulate the money supply without government involvement. Ironically, at the center of Paul’s right-wing attack on the Fed has been the claim that it has debased our currency and is generating inflation; the gold standard would supposedly prevent this debasement. The argument is ironic because reality has often been the opposite of Paul’s claim—at many times in its history Fed policies have kept inflation in check but generated high unemployment, which tends to keep wages down.

In any case, the problem with the Fed is not the existence of a government authority that regulates the country’s money. Before the Fed started operating in 1914, economic crises had been at least as frequent and severe as in later years. The gold standard (which the U.S. abandoned in steps, especially in the 1930s and ultimately in 1971) certainly did not provide stability and general economic well-being. The problem is the nature of the regulatory authority, run as it is in the interests of the banks and bankers, in particular, and of business, in general. The right’s effort to “end the Fed,” however, would likely throw us into an era of even greater economic instability, having us jump out of the frying pan and into the fire.

What to Do?

So what should be done about the Fed? Unfortunately, the Fed is part of the general economic and political problems of the country, and we should not expect to have a central bank that serves people’s real needs until we have a more democratic society, a society in which money does not dominate politics and in which economic policy is not organized around the idea that maintaining profits is always the first priority.

Still, doing something about the Fed could be one step in doing something about those general problems. To begin a process of change, Dimon and other bankers should be removed from their positions of authority within the Fed. The removal of bankers from their positions of special influence would need to be followed by larger changes in the way members of the boards of directors of the regional Federal Reserve banks are chosen, and ultimately also the way members of the Board of Governors of the Fed are selected. Also, the Fed could be given a stronger mandate to act in ways that would reduce unemployment. Most generally, the goal should be to subject the Fed to democratic control.

At the end of the day, changing the Fed—changing how the U.S. economy is controlled—is a part of the larger struggle to change power in the United States so that it is in the hands of most people instead of the very few.

149 Comments

149 Comments


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[-] 2 points by richardkentgates (3269) from Fort Walton Beach, FL 1 year ago

Don't get me wrong, the FED needs to go and econ policy should be in the hands of elected officials.

[-] 1 points by flip (6866) 1 year ago

i am for real stimulus rebuilding the infrastructure that our society is built upon. roads, water systems, energy etc which will create jobs and get the economy going again. i assume you do realize that the fed has a dual mandate to maintain a stable currency and create employment - if not for qe3 what else can they do to push down unemployment?

[-] 1 points by richardkentgates (3269) from Fort Walton Beach, FL 1 year ago

Are you siding with the FED to devalue the dollar with QE3? If you are for devaluing the purchasing power of the working class by moving forward with QE3, just say so. Just some fyi on printing money, and that is what QE3 is, it's printing money.

QE does not go to any road projects, not to any infrastructure. QE does not go out into the real economy in any way shape or form. QE is strictly a handout to the banks.

[-] 1 points by flip (6866) 1 year ago

did you read what i wrote - i am for real stimulus - keynesian stimulus not qe3. why do you have so much trouble understanding this - qe3 (and 1 and 2) are not very helpful - we agree. what we disagree on is the bigger picture. the rich hate inflation - a true keynesian stimulus would put people to work and build our infrastructure for our children and grandchildren. that would mean lower unemployment and then (hopefully) wage increases (do you understand supply and demand in employment). that would cause inflation but more people would be working and more people would be able to afford your cooking. i am a working man like you - i lived through the inflation of the 70's - my house increased in value (and my mortgage was paid in cheaper dollars!) and i raised my prices each year. yes deflation would mean cheaper goods for those who have jobs and money - sadly it has meant fewer jobs and a better life for the rich in the past, does right now and will in the future.

[-] 1 points by notaneoliberal (2269) 1 year ago

Flip, you are correct that Keynes is still as valid today as in the past. The one very significant difference between then, the post depression era, and now, is at that time, we had a trade surplus. We were not outsourcing our wealth and our jobs. Even so, Keynes recognized the dangers of major trade deficits which he described as "leakage". So what has happened, and will continue to happen , as long as our markets remain unprotected is that the stimulus money leaks out of our economy. The Obama stimulus was about 700 billion. The annual trade deficit for 2011 was about 558 billion. http://www.economicpopulist.org/content/2011-annual-trade-deficit-37-us-gdp-china-goods-2-us-gdp

[-] 1 points by flip (6866) 1 year ago

that is why we need a huge renewable energy project - we import 10 to 12 million barrels a day - at $97 a barrel - that's a lot of leakage. i am also for trade barriers

[-] 1 points by notaneoliberal (2269) 1 year ago

I agree on the renewable energy idea, but of course, without completely replacing our current transportation system, (an economically daunting task}, we still won't be free of the need for oil.

[-] 1 points by DKAtoday (27661) from Coon Rapids, MN 1 year ago

Sure some type of oil will be needed for use as a lube - but we do not need to continue to burn it.

We can change all of that - here at home and to the rest of the world. We need not be on a path of perpetual armed conflict.

We have the technology - we have the capability we certainly have the need.

It is all here and ready to use - and this is just what I have stumbled across.

Spread the word.

Green Tech. New and improved - now with Liquid Metal Battery for efficient power storage and distribution.

This is where we should be going: Green Energy we have the technology we just need to use it. This is what I am talking about. A clean future to be implemented NOW!

http://www.hopewellproject.org/

http://ecat.com/

http://www.wired.com/magazine/2009/12/ff_new_nukes/all/1

FuelCell Energy http://apps1.eere.energy.gov/news/progress_alerts.cfm/pa_id=600

You have got to watch this vid: The liquid Metal Battery - another piece to the puzzle.

http://www.ted.com/talks/lang/en/donald_sadoway_the_missing_link_to_renewable_energy.html

Additional Liquid Metal Battery links.

http://lmbcorporation.com/

http://lmbcorporation.com/files/flyerFinal.pdf

Support green energy technology - industry - jobs. Save our world save our economy.

Rework free trade agreements as they are currently detrimental to the Business, Employment, Economic and Environmental health of the USA and in extension the world.

Put an end to outsourcing for Profit over People and the environment.

Stop world wide corporate abuses of people and environments.

Give this some serious thought/consideration.

[-] 1 points by notaneoliberal (2269) 1 year ago

Just one thing DKA. I've seen you post this before. I know your heart is in the right place on this, but please. E cat is NOT available and is quite possibly a scam. I know you would not wish to mislead people so I'm suggesting you leave it out of your list. I am hopeful that LENR has a future but so far, no one has produced a practical device. Andrea Rossi , (the guy behind the E cat), is a bit sketchy.

[-] 2 points by DKAtoday (27661) from Coon Rapids, MN 1 year ago

Thorium is quite possible while we work towards an E-CAT. Thorium is cleaner and safer then uranium and has a much smaller footprint.

[-] 1 points by notaneoliberal (2269) 1 year ago

Yes, Thorium reactors are a proven tech.

[-] 1 points by DKAtoday (27661) from Coon Rapids, MN 1 year ago

This is where we should be going for replacing old decommissioned power plants - and then there is also:

FuelCell Energy http://apps1.eere.energy.gov/news/progress_alerts.cfm/pa_id=600

[-] 1 points by flip (6866) 1 year ago

right - big problems coming - do you know that in 1896 12,000 trains went through corning ny - a small town in the middle of the state - we need to get the rails going again - they use 1/40th the energy of trucks

[-] 1 points by DKAtoday (27661) from Coon Rapids, MN 1 year ago

With proper sound barriers placed along side of the tracks in populated areas - trains can be so loud and much more irritating then a jet because they take so long to pass on by.

[-] 1 points by flip (6866) 1 year ago

and so therefore?

[-] 1 points by DKAtoday (27661) from Coon Rapids, MN 1 year ago

Nothing. Trains should be used for moving freight and they can also be modified to be electric and they can be modified to burn a different fuel like Hydrogen. They can also be modified to be quieter - as their noise can be hellacious. Trains make perfect sense to do the bulk freight work.

[-] 1 points by flip (6866) 1 year ago

ok, and moving people like in europe - there will be problems no matter how we work it out but cars have got to go - at least in the way we use them now.

[-] 1 points by DKAtoday (27661) from Coon Rapids, MN 1 year ago

There are alternative fuels for them as well.

Hydrogen fuel cell car

[-] 1 points by flip (6866) 1 year ago

once again we agree but who is going to inform them - wall street - obama - certainly not ryan

[-] 1 points by DKAtoday (27661) from Coon Rapids, MN 1 year ago

It has to happen through public activism. Just like the state by state campaign to remove corporate personhood - Move to Amend. It will need public education so that they understand what we are facing and that we have alternatives - then it may well take a government style stimulus ( kind of ) to get it going. Interest free loans to small business to get them retooled. Then interest free loans to get the infrastructure built. This has to go with restarting much in the way of manufacturing to get USA citizens back to work making the products and materials needed for these infrastructure and transportation changeovers. This means leveling the economic playing field so that outsourced products will come to the USA market along with imports at a competitive cost to the domestically made.

Nothing good can happen over all economically until domestic manufacture is supported by the governments trade policies.

The stock the government still owns of GM would be very useful in getting them on board.

Remove subsidies from fossil fuel and place that money into The rebirth of the USA and we have a pretty good start. Along with proper taxation of the wealthy - and the end of corpoRAT welfare. Perhaps see about doing something about the trillions of dollars hidden offshore.

[-] 1 points by flip (6866) 1 year ago

as i said i hope you are right but i am betting the farm (literally) that you are wrong. we do not have time before resource scarcity shuts down whatever we try to do. china knows it and they have a plan. we do not have a government or business class capable of the term thinking that it takes to pull out of this mess. buckminster fuller called it in 1969 but we were too stupid to listen. once again i will be happy if you are right. the investor jeremy grantham has written about the coming resource scarcity if you are interested. stephen leeb is another one who is interesting to read.

[-] 1 points by DKAtoday (27661) from Coon Rapids, MN 1 year ago

It is why the public needs to be informed as of yesterday and we need to get very busy - involved busy.

[-] 1 points by flip (6866) 1 year ago

no chance of that happening - do you think we are going to change over 150 million cars any time soon. and when do you think that might start? the energy costs alone will make it impossible. oil is $97 a barrel with the world in recession. i hope you are right but our society is built on cheap oil (along with too many other commodities) and that is running out - sooner than most think. read the investor jeremy grantham if you want an eye opening tutorial on the subject

[-] 1 points by DKAtoday (27661) from Coon Rapids, MN 1 year ago

It is an as you go project. The thing is to start manufacturing them - just like the electric hybrids they are starting to make ( rather poorly but it is a start ). As the gas guzzlers breakdown and get junked there will be used alternative fuel ( electric/Hydrogen ) vehicles to take their place. Swapping out the old for the new.

[-] 1 points by notaneoliberal (2269) 1 year ago

Yes, trains make sense. Preferably electric. A few decades ago we had electric trollys in many of our major cities.

[-] 1 points by richardkentgates (3269) from Fort Walton Beach, FL 1 year ago

that would cause inflation but more people would be working and more people would be able to afford your cooking.

Inflation by actual demand and wage increases is sustainable inflation. I'm not arguing against that. I'm arguing about the artificial inflation from QE. Yes, inflation is not accelerating, because the would be inflation is offset by the underlying deflation, because low demand. I am not against a jobs bill, I have already said this.

[-] 1 points by flip (6866) 1 year ago

"I am not against a jobs bill, I have already said this." - never said it to me! you simply rant about inflation and you are incorrect on that point (keeping in mind what i said about importers and exporters). you are against qe3 fine - i am not a fan of what the fed is doing but obama is bragging about not spending money - that is the wrong policy - from forbes "Who Is The Smallest Government Spender Since Eisenhower? Would You Believe It's Barack Obama" - the feds mandate is full employment and stable currency - a contradiction (the ecb has only one mandate - guess which) - someone has to do something to try to stimulate the economy - what is your idea?

[-] 1 points by richardkentgates (3269) from Fort Walton Beach, FL 1 year ago

Stop any further easing, use stimulus for a jobs bill, and to write down principle on upside down mortgages. Reign in the potential inflation from previous QEs by increasing leverage requirements.

[-] 1 points by mayda (57) 1 year ago

ok but we still disagree on your main point - it is an important one - we cannot solve the coming problems unless we know what they are and have real solutions

[-] 1 points by richardkentgates (3269) from Fort Walton Beach, FL 1 year ago

lol, we probably will not solve anything. I'm just hoping to add my own entry in the larger conversation.

[-] 1 points by mayda (57) 1 year ago

agreed but hopefully we will force them to let us solve our problems. much to be done before that happens. educating people is one of the first steps.

[-] 1 points by BradB (2693) from Washington, DC 1 year ago

"..someone has to do something to try to stimulate the economy - what is your idea?..."

give the Fed some competition .... a Social Reserve Bank ... made up of state owned banks like the Bank of North Dakota

[-] 1 points by flip (6866) 1 year ago

right on brother - nationalize the banks - that is what the populists were for and they knew something about money and the economy

[-] 1 points by BradB (2693) from Washington, DC 1 year ago

;) yeah... but we don't want to replace the Fed, and it's banks.... greed does make to world go round ....

we want an additional source of capital .... one focused on non materialistic wealth's like education ... healthcare ... art, research ... etc...

things that are valued not on "tangible profit" but on "intangible gain"

[-] 2 points by flip (6866) 1 year ago

agreed - do you know about michael hudson and his info about currencies etc - he is really good at helping to understand the whole process. and very few understand it! the populists did in 1890 - dirt poor uneducated farmers - they figured it out - we can to.

[-] 1 points by BradB (2693) from Washington, DC 1 year ago

cool .. I'll ck it out.... late for work ;)

[-] 1 points by flip (6866) 1 year ago

fyi - The Fed is supposed to minimize unemployment as well as inflation, and before 1979, it tried to achieve some sort of balance between the two goals. But under Volcker and his successor, Alan Greenspan, it's simply aimed for low inflation, regardless of the effect that has on jobs. In fact, Greenspan has asked Congress to relieve the Fed of responsibility for keeping unemployment down. Inflation was high when Volcker took over-13% or so. To get it under control, he tightened the money supply. This brought on a monster recession, the biggest since World War II. Within a year, the prime rate shot up to the unheard-of level of 21.5% (compared to an average of 7.6% for the fourteen previous years). Unemployment peaked at just under 11%. According to author Robert Sherrill, Volcker stated, upon taking office, that "the standard of living for the average American has to decline." Sherrill says Volcker was recommended by David Rockefeller because "Wall Street and the international banking fraternity loved [Volcker]. They hated inflation-bankers don't like to be repaid in money that is softer than the money they lend, even if the softer money makes the economy hum-and they knew that Volcker was mean enough to destroy the economy to save the hardness of their dollars."

[-] 1 points by flip (6866) 1 year ago

no the fed does not need to go - it needs to be democratized - read about the populist movement. they understood (those dirt poor farmers) the need for a central bank and democratic fiat currency. not sure what history you are reading but we do not see the same world

[-] 2 points by richardkentgates (3269) from Fort Walton Beach, FL 1 year ago

We don't need a central bank, not at all. The treasury can take over printing and working directly with the banks. There is your money supply. Econ policy should be done by a comity like we have the intel and so forth. These people would be the word on econ policy and regulation, and could be held to account by the voters. This sir is the path to democratic capitalism.

[-] 1 points by flip (6866) 1 year ago

The Fed is supposed to minimize unemployment as well as inflation, and before 1979, it tried to achieve some sort of balance between the two goals. But under Volcker and his successor, Alan Greenspan, it's simply aimed for low inflation, regardless of the effect that has on jobs. In fact, Greenspan has asked Congress to relieve the Fed of responsibility for keeping unemployment down. Inflation was high when Volcker took over-13% or so. To get it under control, he tightened the money supply. This brought on a monster recession, the biggest since World War II. Within a year, the prime rate shot up to the unheard-of level of 21.5% (compared to an average of 7.6% for the fourteen previous years). Unemployment peaked at just under 11%. According to author Robert Sherrill, Volcker stated, upon taking office, that "the standard of living for the average American has to decline." Sherrill says Volcker was recommended by David Rockefeller because "Wall Street and the international banking fraternity loved [Volcker]. They hated inflation-bankers don't like to be repaid in money that is softer than the money they lend, even if the softer money makes the economy hum-and they knew that Volcker was mean enough to destroy the economy to save the hardness of their dollars."

[-] 1 points by shadz66 (19985) 1 year ago

"US 'Fifty Wealthiest Lawmakers' list ; A Congress of the rich, by the rich, and for the rich", by Eric London :

The above attests to how 'The Corporate Capture of The U$A' is enabled and why so little ever really changes, especially re. Banking / Fed, Reform.

ad iudicium ...

[-] 1 points by freewriterguy (882) 1 year ago

i dont think it was the feds that supported the banks, but the politicians, and goldman sach, and lehman brothers, and AIG, all sold obama a lemon at a "behind closed doors congressional meeting" remember ? But the message is still important. There was talk of nationwide "martial law" on the following monday if there wasnt a bail out agreement made in those behind closed doors. I dont think our government should have the authority to put the country under "martial law" as an enforcement, or blackmail of our representatives. A more specific address to the problem I think.

another point is if the fed is abolished, in favor of a government run bank own by we the people. couldnt our government live off the interest gained, and no longer need to double and triple tax the people???

[-] 1 points by BradB (2693) from Washington, DC 1 year ago

The Fed does not call the shots... The Treasury has the last say... the Fed only makes the suggestions....they are a privately owned Bank (edited: originally I said "think tank").... but in recent times the Treasury does whatever the Fed says.... that's the REAL problem...

[-] 2 points by flip (6866) 1 year ago

the real problem is lack of democracy

[-] 1 points by notaneoliberal (2269) 1 year ago

Much of what affects the economy is beyond the control or the purview of the Fed. The Fed has no say in the installment of most of the Neoliberal policies that have been instituted in the last few decades.

[-] 2 points by flip (6866) 1 year ago

true - that is the implication of his last sentence - no? "changing the Fed—changing how the U.S. economy is controlled—is a part of the larger struggle to change power in the United States so that it is in the hands of most people instead of the very few."

[-] 1 points by notaneoliberal (2269) 1 year ago

Yes, we agree.

[-] 1 points by flip (6866) 1 year ago

wow - thanks for a very short but reasonable dialogue - i guess the reasonable ones are often short

[-] 1 points by kaiserw (211) 1 year ago

The Fed by supplying money, creates the perverse incentives. In criminal investigations, it has a specific term, criminalistic system or incentives or something. The idea is that if you put strong enough incentives out there, a good percentage of normal people will act on it.

Have you ever heard of root cause analysis?

In many system failures, the catalyst is laid blame, i.e. the last truck to drive over a bridge before it collapses, the lightning strike that started the mega forest fire. etc. Where instead, the problem has numerous causes, largely quite long term in nature.

Glass Stegal - yes, that was stupid, but that was it's own catalyst among many, it goes much deeper than that. The bailouts of the 1970s (lockheed martin, GM etc), government picking winners and losers, but alas, it's still deeper. It starts at the foundation, that's the monetary system, the rule of law, and the fed.

[-] 1 points by MattLHolck (16833) from San Diego, CA 1 year ago

the FED loan money to specific aristocrats

that turn and loan that money multiple times at higher interest to the people

thus we have a debtor economy

[-] 1 points by shadz66 (19985) 1 year ago

Occupy Banking !!! Good Post 'flip' !! Reclaim 'The Fed' from The Banksters & for The 99% !

radix omnium malorum est cupiditas ...

[-] 0 points by Cocreator (306) 1 year ago

The Fed, operates in its own system, who controls the money supply controls the country.. Rothschild said..And it was So..Rothschild sets the price of gold every day for three hundred years..It is Rothschild that Decides who lives and dies, whom is president, who to go to war with, funding both sides, to be sure and sell lots of guns and drugs..Arrest these Criminals, Seize their wealth and Give it to the People..Iceland is the Blueprint..

[-] 2 points by flip (6866) 1 year ago

give the rothschild thing a rest - we don't need that nonsense here. as to iceland here is a piece of an article -

Iceland’s economy is growing again after the deep recession that struck in 2008. The country’s former Prime Minister is on trial for his role in the crisis. But the economic and political crisis is far from over.

During one week in October 2008, the country’s three major banks collapsed and the stock exchange index fell from 9000 to 14. GDP fell by over 10% and the unemployment rate increased sevenfold. None of the 320,000 inhabitants could escape the blast.

The author, Haukur Ingvarsson, told the Danish newspaper, Information, about his grandfather: “First, he lost all his savings. Then he lost faith in the society he had so proudly been a part of building. And finally he lost his mind... Four or five months later he was dead.”

Today, when economic growth seems to be coming back, the after-effects of the crisis remain: “Up to half of all Icelandic families are bankrupt, many have stopped paying their bills and even people with good education and permanent jobs are under severe pressure,” summarizes Information.

How can the economic recovery and the calm that seems to have replaced the big protests of 2008-09 be explained?

The main reason for growth is a gigantic devaluation. At most, the Icelandic krona fell by 77% and it is now at about 50% below its previous value. This has increased tourism and fish exports.

The krona’s value reduction also increased the foreign debt. But the Icelandic government guaranteed only lenders in the country. “Much of the cost of debt restructuring was borne indirectly by foreign creditors, who took significant losses when the banks collapsed,” says the International Monetary Fund (IMF) in its latest forecast (World Economic Outlook, April 2012).

In response to the many angry demonstrations and to avoid a total collapse, the Icelandic government decided on several temporary measures: an end to foreclosures, suspension of debt payments for housing, a rule that no one should have housing debt of more than 110% of the household’s annual income, etc. Costs for these measures and the state bank takeover was financed with loans from the IMF of $10 billion - up to 20,000 euros per Icelander.

Negotiations of individual housing loans have subsequently led to reductions of debt and temporarily reduced interest rates. But still these kind of negotiations have been completed for only 35% of all households.

Several of the measures have only been possible because Iceland has so few inhabitants. But it remains yet to be seen the degree to which Iceland managed to put households back on their feet, the IMF report concludes. “Significant problems remain,” the Financial Times concluded in a recent analysis. The average household has lost 30% of its purchasing power since 2008. Household debt is still above 200 percent of disposable income.

Still, one quarter of the re-organised bank debt is “bad loans”. One reason for the debts continuing to be so high is that they are pegged to inflation, currently 6% annually, while wages have remained constant or decreased.

[-] 0 points by richardkentgates (3269) from Fort Walton Beach, FL 1 year ago

This thread started inaccurately. The FED has never fought off inflation. The FED makes goals on increases in inflation. The system is built for ever increasing prices by inflation alone. This is said to be required to prevent deflation under the notion that any deflation can only be catastrophic. This is of course, entirely untrue. If the economy becomes artificially inflated, as it is now, a certain level of deflation is needed to bring prices back down to match real demand. The FED pumps money during what should be deflationary periods in order to maintain investor profits while they wait for demand to catch up or production costs to go down (layoffs). This is assuming that it will always happen, demand will always catch up. But there are times, like now, that demand is incapable of catching up. Business is already producing at max efficiency and wages are low and stagnate. Because of this reality, demand is not going to catch up this time. So the FED is going to print money until we have another collapse and hyperinflation kicks in. All because they want blood from a turnip. Because they are overwhelmed with civilized glut.

http://web.pdx.edu/~ito/Bernanke_Mishkin1997JEP.pdf

[-] 1 points by flip (6866) 1 year ago

volker and the fed did not fight inflation in the 80's? by bringing on the worst recession since 1930 - no?

[-] 1 points by richardkentgates (3269) from Fort Walton Beach, FL 1 year ago

No. The recession in the 80s was a product of energy costs and low employment. Low employment means low demand. And yes, sometimes a recession is the result of market corrections. Without the recession of the 80s, prices would have been so over inflated, there would have been no boom in the 90s.

This is what I'm talking about. You have bought into complete horse shit . Unemployment was high already before the recession in the 80s, yet you blame the recession. How the fuck can you blame the recession for high unemployment if unemployment was already 9% before the recession started? You have them flip flop backwards.

And yes, deflation and recession can be painful. Look at hyperinflation and tell me whats worse. Slow growth or money that is worthless? Start looking at the time lines for the components of these motions before buying into the backwards reality that economists have been selling you.

No sir, the recession was not caused by deflation.

The 80s recession was cause by high energy prices and high unemployment (low demand). Volker did the right thing by not freaking out and hyperinflating the economy. As a result, prices stayed low aside from energy and the recession was gone and done in less than half a decade. Contrast that with now, we are looking at decades before the economy stabilizes. We are projected at 1.9% growth this year, and thats not even considering the budget cuts. We are also looking at a US credit downgrade, again.

[-] 1 points by flip (6866) 1 year ago

i do not agree with your history - read "secrets of the temple" - Volcker raised the federal funds rate, which had averaged 11.2% in 1979, to a peak of 20% in June 1981. The prime rate rose to 21.5% in 1981 as well.

Volcker's Fed elicited the strongest political attacks and most widespread protests in the history of the Federal Reserve (unlike any protests experienced since 1922), due to the effects of the high interest rates on the construction and farming sectors, culminating in indebted farmers driving their tractors onto C Street NW and blockading the Eccles Building

[-] 1 points by richardkentgates (3269) from Fort Walton Beach, FL 1 year ago

Unemployment was trending higher starting in the mid 70s. Energy prices were still high, in decline but not enough when matched with high unemployment. I never said Volker chose the best way to do it, but the results are inarguable. The 1980s recession lasted but a blink of they eye compared to our current situation and they had unemployment over 10%. And of course people were pissed off, nobody gives a damn about the long term till it bites them in the ass, as we will all soon see thanks to the FEDs current inflationary policy.

PS, farmers never stop bitching about the gov. They get subsidies and yet bitch about food stamp, go fig.

[-] 1 points by flip (6866) 1 year ago

unemployment peaked about 9 in 1974,75 and declined to under 6 by 80 - volker moved the needle in a big way! you said this "This thread started inaccurately. The FED has never fought off inflation." - completely incorrect. your whole history of that period is wrong - we agree that this one is different but i doubt you understand why. inflation is not the problem. the rich love deflation and hate inflation since it redistributes wealth. those who hold our mortgages and treausry bonds love deflation!

[-] 0 points by richardkentgates (3269) from Fort Walton Beach, FL 1 year ago

You have it backwards homie. Deflation means lower prices. Lower prices on the billions of dollars worth of products sitting in warehouses. This is a loss of asset value. The shareholders take the hit for those lower prices and consumers get a great deal. You don't seem to understand the definition of inflation or deflation. Let me help you, because you have them backwards.

Inflation = Higher prices, weaker dollar.

Deflation = Lower prices , stronger dollar.

[-] 2 points by flip (6866) 1 year ago

yes inflation means higher prices - as in my house increases in value and my mortgage is paid in cheaper dollars - banks and bond holders are not happy with that. you do realize that the wealth of most people is in their home and their biggest expense is their mortgage. i lived and worked and owned a home through the terrible inflation of the 70's so don't homie me boy! those with big piles of cash love deflation - those with big piles of 30 year treasuries at fixed interest rates love deflation. the economy is changing with floating interest rates and wages that have lost thier historic ties to inflation (read greenspan on worker insecurity here). sorry you need to read different sources on this subject - whatever study you have done has not helped you - homie.

[-] 1 points by richardkentgates (3269) from Fort Walton Beach, FL 1 year ago

Banks love housing inflation because it allows you to remortgage your house, feeding them with more interest payments. That is what I mean by the gov using stimulus for the people, not wealth retention. The stimulus should have been used partially to write down the principle on upside down mortgages.

Your focus on bonds is not reflective of the majority of financial instruments or transactions. You continue to ignore stocks, derivatives, and every other tool that feeds on inflation. BIG picture homie.

[-] 2 points by flip (6866) 1 year ago

if you are correct then this is the first time that our government responds to the needs of ordinary people over the needs of the elite. the story like most, is complex and simple at the same time - bondholders run the world to a great extent - they want deflation - so do you aparently. you are boring me and i need to go to work - you can aggitate for deflation if you like - do the work of the rich and mr mellon - and do it here on an ows site. make slots of sense for those underwater homeowners to see their houses become less valuable - wow - i konw you think you are smart but - oh well i have to go to work and do some real thinking

[-] 1 points by richardkentgates (3269) from Fort Walton Beach, FL 1 year ago

Every investment is a risk. This is the nature of investment. The workers working for a paycheck, none of them agreed to risk the value of their labor. Why should the working class and poor continue to foot the bill so investors don't have to assume the consequences of the risk they bought into, however low that risk was perceived to be?

[-] 1 points by flip (6866) 1 year ago

now we agree but this has nothing to do with what you have been working from you original comment. let me know what you think about noams comment about democracy and capitalism

[-] 1 points by richardkentgates (3269) from Fort Walton Beach, FL 1 year ago

lol, what you mean to say is that you have a different idea about how to get us to the same place. Such is the nature of political debate.

[-] 1 points by VQkag2 (16478) 1 year ago

If the Tea party plays games like spoiled brats again we will have another tea party downgrade. No doubt. I agree with that.

So we should deflate the interest rates? And this is good for the 99%?

If you say so! Let's do it! How do we start? Whats the 1st step?

[-] 1 points by richardkentgates (3269) from Fort Walton Beach, FL 1 year ago

I don't care for your party preaching, but at least you have a sense of humor. You're spinning your wheels with me though, I have no interest in my chosen party so long as they do not begin acting for the working class instead of making empty promises. If you like clamoring about empty promises, thats your choice.

[-] 2 points by VQkag2 (16478) 1 year ago

I only mentioned anti Tea party comment. I didn't think you supported them. I suppose you DID leave out their complicity in the downgrade debacle but still I don't recall you saying you support the TP.

Is that the party preaching you object to? I will refrain from attacking the Tea party if it bothers you. Really I just want to understand your plans.

How do we start? Whats the1st step?

[-] 2 points by richardkentgates (3269) from Fort Walton Beach, FL 1 year ago

Remove the FED, give printing obligations to the treasury, and move policy to elected officials in the form of a comity so they can be held to account by the voters.

[-] 1 points by VQkag2 (16478) 1 year ago

The FED is corrupt, and represents a most damaging conflict of interest since bankers run it. Treasury is probably ok but Congress (House) might be a better place. Since they are elected more often, Treasury is appointed, And House already has purse string responsibilities.

I don't see how we end the FED since no body in power (except Ron Paul) is talkin' about it. Agitate for the end of the FED is certainly something I've seen OWS supporters taking part in. Not so much the wider movement.

So I guess the 1st step is to convince OWS supporters to agree and agitate. Seems that is what you're doing. I want to support this effort although I must be honest and say I do not see much hope this will happen very quickly.

I think I don't understand it entirely! I think voters might not either. It is quite possible this will not happen and then what? A major crash! Seems hopeless. Are you preparing for that possibility?

[-] 1 points by richardkentgates (3269) from Fort Walton Beach, FL 1 year ago

The treasury would only handle the printing. Policy would be by elected persons only.

http://www.youtube.com/watch?v=4IdPyYRnOY0

[-] 1 points by VQkag2 (16478) 1 year ago

Good. But to understand this concept is such a hurdle, and the current state of opinion is focused elsewhere, To get consensus seems impossible.

Your efforts have been intense, and consistent but I think the hurdles are so great that we should be getting ready for a massive crash. No?

[-] 1 points by richardkentgates (3269) from Fort Walton Beach, FL 1 year ago

If it happens, it happens. If it is possible to yell about this until someone listens, someone who can take action, I will continue trying. It's that the nature of peaceful protest?

[-] 1 points by VQkag2 (16478) 1 year ago

No doubt. It is heroic! Have you had any measurable support? Is there a working group? A growing coalition.? This is important enough for a website, Advertising. I guess you're not gonna approach establishment pols.

But if you did, the response or simple questioning of establishment pols might bring the issue to the fore!

Anything to make the people aware, awoken, otherwise we are looking at hoarding food and guns. I don't wanna live like that. Are you willing to live like that.?

Think of all the people who will die!

[-] 1 points by richardkentgates (3269) from Fort Walton Beach, FL 1 year ago

smart ass. What exactly are you doing? You don't even have a platform for your protesting. All I've seen you do is cheerlead for the dems.

[-] 1 points by VQkag2 (16478) 1 year ago

Oh so you say it isn't real? Just noise.? We should ignore it and instead focus on the FED issue?

Maybe the FED issue is the distraction so that we ignore people losing their right to vote.!

Huh? What about that?

[-] 1 points by VQkag2 (16478) 1 year ago

So the voter suppression thing is ok with you?

[-] 1 points by richardkentgates (3269) from Fort Walton Beach, FL 1 year ago

noise created by both sides (d/r) so there isn't any air time in the news cycle that could result in stories about the FED. Both candidates are pro-money-printing.

[-] 1 points by VQkag2 (16478) 1 year ago

Well if we are headed to a better economy in either case that might make it a tougher sell.

Good luck.

What do you think of this issue?

http://occupywallst.org/forum/and-now-the-tea-party-is-in-on-the-republican-vote/

[-] 0 points by richardkentgates (3269) from Fort Walton Beach, FL 1 year ago

I think my dad has been operating a website for a tea party group in Iowa for a long time, and even without the troll issues Occupy has, they have lost a lot of participation in the last two years.

[-] 1 points by VQkag2 (16478) 1 year ago

What happened? Changed you mind?. Gave up on me? I may not be as smart as you but I am making an effort.

[-] 1 points by VQkag2 (16478) 1 year ago

Damn!

Ok. Here we go again.

If we DON'T implement these FED policy/structure changes we will NOT have a massive great depression crash. Is that right? I thought this proposal was designed to avoid this.

If we DO implement this proposal (which is really not likely) Will things get worse before they get better? Will things just immediately improve for the 99%.?

Please I just want to understand. Will you answer now?

[-] 1 points by richardkentgates (3269) from Fort Walton Beach, FL 1 year ago

Policy enacted: They will get worse before they get better.

Not enacted: The economy will stagnate, then get worse, then get better.

It's a matter of fessing up to the problem and dealing with it now, under controlled policy, instead of kicking the can and having less control when we hit that next bump in the road.

[-] 1 points by VQkag2 (16478) 1 year ago

Ok. So please be patient with me. I didn't go to college, and barely got through high school. But if understand you now:

If we DON'T implement your FED policy/structure changes we will NOT have a massive great depression crash. Is that right? I thought your proposal was designed to avoid this.

If we DO implement your proposal (which is really not likely) Will things get worse before they get better? Will things just immediately improve for the 99%.?

Please I just want to understand.

[-] 2 points by richardkentgates (3269) from Fort Walton Beach, FL 1 year ago

This isn't my proposal. This is what I'm advocating for. I have some of my own ideas on how it should be done, but I am not the author of the concept. I would suggest the links I posted on my threads bout this topic. This debate is however, the crux of supply side v demand side.

[-] 1 points by VQkag2 (16478) 1 year ago

I meant if you ARE correct and we do nothing the crash will be massive, and people will die.

I'm assuming you are proposing something that will avoid making things worse and people dying! So I will disregard the criticism of your proposal by MSM, or other posters.

My question is: Since your proposal is not likely to happen, we WILL have a massive crash, What should we do to prepare for that? What are you doing to prepare for that?

Hoarding food, guns, planning an escape from the US? What?

[-] 1 points by richardkentgates (3269) from Fort Walton Beach, FL 1 year ago

A crash is not what everyone has in mind. The media is selling it to you like that so you are attached to their interest. FDIC insurance will prevent the problems of the depression with depositors loosing their cash. The defaulted banks and institutions will be seized by the government because of the FDIC rules about winding down failed institutions, and their assets sold off to make back the money. The big banks will go boom, the small banks will get a boom in new accounts, and prices will fall as WallSt will be in the dirt. there will be about a 6-8 month freakout but not much will change. After about 2 years, the econ will be as strong as it's ever been.

I said what I meant. It's all fuss and bluster. The system, even without glass steagall, is perfectly capable of dealing with it. You're being overly dramatic. The real economy has not actually improved much. We are still pretty low. WallSt is giving the appearance of some height to fall from in a crash but we are STILL CRASHING RIGHT THIS SECOND. Thats why the FED is going to go ahead with QE3. We have two roads, let it be and focus on a mainstreet recovery ((lowerprices=higher demand) do not print any more money) or print more money (QE3) which keeps price high and demand low, which will lead to a credit downgrade, which will lead to cash dumping on the banks from investors, which will kickstart hyperinflation.

[-] 1 points by VQkag2 (16478) 1 year ago

Calling me names is unproductive. The box you want me in is irrelevant. I do not subscribe to your definition of me. You wanna hear my Dem defense? (You said you didn't) Just attack them unfairly, or inaccurately!

You wanna talk about your issue? I wanna!.

I am being absolutely honest. There is little hope this particular FED change will happen. To the extent I understand it, I support it.

If you ARE correct then the crash will be massive, and people WILL die.

What should we do to prepare for that!?. What are YOU doing to prepare for that.?

[-] 1 points by richardkentgates (3269) from Fort Walton Beach, FL 1 year ago

A crash is not what everyone has in mind. The media is selling it to you like that so you are attached to their interest. FDIC insurance will prevent the problems of the depression with depositors loosing their cash. The defaulted banks and institutions will be seized by the government because of the FDIC rules about winding down failed institutions, and their assets sold off to make back the money. The big banks will go boom, the small banks will get a boom in new accounts, and prices will fall as WallSt will be in the dirt. there will be about a 6-8 month freakout but not much will change. After about 2 years, the econ will be as strong as it's ever been.

[+] -4 points by cajunMan (-10) 1 year ago

In other related news!!!! obama is slipping more in the polls, bye turd

[-] 1 points by VQkag2 (16478) 1 year ago

Anti Obama partisanship! Feel free to just ignore!

[-] 1 points by flip (6866) 1 year ago

During the 1970s inflation became a regular feature of American life, with yearly increases in the consumer price index (CPI) regularly exceeding 10%. As the economist J. Bradford Delong has pointed out, this marked the most sustained period of peacetime inflation in U.S. history. Scholars disagree about the precise causes of the inflation of the 1970s, but most conclude that external supply shocks such as the 1973-74 oil crisis and large levels of government spending during the 1960s and 1970s were instrumental in driving up wages and prices.

American policymakers were slow to grasp the nature of the inflation of the 1970s, and most steps taken to maintain price stability during the decade, such as Richard Nixon's imposition of wage and price controls in 1971, proved ineffective. Although inflation came down slightly in the mid 1970s, prices soon began to accelerate to the point that, by the end of the decade, curbing inflation replaced reducing unemployment as the Carter administration's primary economic priority.

To this effect, in July 1979 Jimmy Carter appointed Paul Volcker to succeed G. William Miller as Chairman of the U.S. Federal Reserve. Although there remains some debate about why Carter decided on Volcker, who was then serving as President of the Federal Reserve Bank of New York, the move signaled Carter's sanctioning of a disinflationary monetary policy.

Volcker's initial strategy in this regard was to seek to reduce the supply of money in the American economy. Soon after taking office in August 1979 he instituted a policy of monetary targeting in which the Federal Reserve focused on directly limiting the amount of money in circulation through tighter control over private bank reserves. This marked an important shift in Fed strategy, which to that point had largely concentrated on raising or lowering interest rates through its open market operations. However, it was not until 1981, when the Fed refused to loosen monetary policy even through the economy was mired in a recession, that inflation began to come down

[-] 2 points by ogoj11 (263) 1 year ago

Obviously, an intelligent comment and well informed, but...

All such discussion of economics in terms of prices and capital flows are obfuscatory. You're speaking their language and contributing to mystification. The right has now created a situation around the world where talk about money serves to confuse and justify austerity.

I'm not saying that money is unimportant, just that every comment about money can be translated into a comment about the relations between people. So, for instance, flip refers to rising oil prices, but the comment could be translated into a remark about the rising power of elites in oil exporting nations. Similarly, bank reserves could be translated into a comment about class relations, the hiring power of financial bosses. Do you see a project here?

[-] 0 points by flip (6866) 1 year ago

we disagree - first of all you quote richard not me. you may be able to imagine a world without money but we have along way to go so any talk like that is not helpful seems to me. we probaly agree on much but you might want to read "debt the first 500 years" and then "secrets of the temple" to educate your self on the real world

[-] 2 points by ogoj11 (263) 1 year ago

I 'm watching the exchange between you and richard, which is proving my point. Two people on the same side cannot agree about the social meaning of economic terms like inflation and deflation. I am not advocating a world without money. I am suggesting that we translate economic words, terms, and analyses into language about human relations, buying someone's labor power for instance.

[-] 2 points by flip (6866) 1 year ago

sure - you can go on about wage slavery and someone from 1860 would understand completely - now what.....

[-] 1 points by ogoj11 (263) 1 year ago

Maybe I used a bad example. I am not trying to use emotive or ideological language. I'm reading you as someone who enjoys throwing around economic vocabulary, and lording his 'mastery' of the arcane over the stupid and uninformed.

Maybe another try. Inflation and deflation need to be demystified. Keep it simple. Who wins? Who loses? Owners of goods lose when goods are worth less. Owners of capital lose when capital is worth less.

I think some of the confusion between you and richard arises from introducing the next step. (After the value of a home rises, what happens?) Also, while some of our 99% has significant value locked up in mortgaged homes, most do not.

[-] 1 points by flip (6866) 1 year ago

not exactly sure of the demographics but most of the middle class - what is left of it has their money in their home - home ownership is still large within the 99% - check the numbers and let me know. and just so you know you are reading me wrong!

[-] 0 points by richardkentgates (3269) from Fort Walton Beach, FL 1 year ago

Yes, cars are already better than walking, what the hell were the Wright brothers thinking. Now what.....

[-] 1 points by flip (6866) 1 year ago

do you think keynes was for expanding the feds balance sheet? wow - you need to read a bit - keynes said that if the government cannot think of better projects to build (schools and renewable energy for instance) then they could - "If the Treasury were to fill old bottles with bank-notes, bury them at suitable depths in disused coal-mines which are then filled up to the surface with town rubbish, and leave it to private enterprise on well-tried principles of laissez-faire to dig the notes up again (the right to do so being obtained, of course, by tendering for leases of the note-bearing territory), there need be no more unemployment and, with the help of repercussions, the real income of the community, and its capital wealth, would probably become a good deal greater than it actually is." - think about it before you respond - it puts the lie to the gold standard and the whole nonsense about money printing. then think about ww2 and the depression - think - you can do it.

[-] 0 points by richardkentgates (3269) from Fort Walton Beach, FL 1 year ago

back to spinning. obviously you are not a legitimate user either. I'm done paying your game, fuck off.

[-] 2 points by flip (6866) 1 year ago

you could try to point out how inflation is good for those who hold the fixed rate mortgage on your house or those who hold 30 yr treasuries paying 2.8%. at 2.8% you are expecting defaltion - do us all a favor and try to understand this one concept. the big boys hold the 30 yr - ever heard of the bond vigilanties - here this will help - can you use google - "Bond Vigilantes Are Now Deficit Cheerleaders" by Stan Collenderif - and check this out - "Chomsky calls these fuckers a "virtual senate" accountable to no one" - if you look up those phrases you may understand. if you cannot understand that those people are big players then you really need help - why so angry - the bully who got hit in the nose. you want deflation it is very straight forward - simple econoic history. deflation is the answer - wow and you have a blog! go ask your neighbors if that's what they want - i think they will tell you that they are living deflation - houses in that shit state have dropped how much? and you want more! i imagine that really helped them. how can you not see that you are arguing for the same thing that the rich want - how can you not see that? maybe you can explain it without the anger - homie!

[-] 1 points by richardkentgates (3269) from Fort Walton Beach, FL 1 year ago

http://blog.richardkentgates.com and stop name dropping, it's tack and doesn't add credibility to your propaganda.

[-] 1 points by flip (6866) 1 year ago

yes i admit to annoying comments - and you admit to anything - like spouting nonsense about deflation - care to comment on the "virtual senate" or the "bond vigilanties" - no i suppose not - or 30 year treasuries or mortgage holders or maybe the price of your neighbors home - have you asked them how they like deflation? no let's not be serious on the ows site - lets play little boy games instead - why not write something on your blog!

[-] 1 points by flip (6866) 1 year ago

no, no , no - your quotes are still there just as i put them and just as you wrote them. are you trying to claim you did not write those things - which ones would you like to take back. well at least maybe you will stop saying that shit in the future even if you cannot admit you don't know what you are talking about. it's ok - not everyone is man enough to do it. maybe you edited your comments - oh and thanks for your blog info - i will go right to it - must be very informative. name dropping my ass - and you would not survive in a debate class or in an occupy park since the others listening would call you on your shit. have you been to the park - i mean the real deal in nyc. no - you wouldn't last long. you are only ok when on the internet - no way to force the issue and make some dumb ass back down or look like a complete fool - yea that would be you. oh, right - you are done with this shit - your best move so far - go pick on some little boy tough guy - and learn something - try to be helpful.

[-] 1 points by richardkentgates (3269) from Fort Walton Beach, FL 1 year ago

no way to force the issue and make some dumb ass back down or look like a complete fool - yea that would be you.

I think you make it quite clear, your anger at me is your issue, not the content of the discussion.

oh, right - you are done with this shit - your best move so far - go pick on some little boy tough guy - and learn something - try to be helpful.

I didn't realize I was talking to a nut job. Thanks for clearing that up.

[-] 1 points by flip (6866) 1 year ago

i will post this up for all to read but maybe it will help you - you could do some of the looking on your own - you seem to have time on your hands - chomsky on the virtual senate - QUESTION: In a text of yours you say that the world is ruled by a "virtual senate". Can you tell me something more about this?

CHOMSKY: The term is not mine. I am borrowing it from the professional literature on international economics. The "virtual senate" consists of investors and lenders. They can effectively decide social and economic policy by capital flight, attacks on currency that undermine the economy, and other means that have been provided by the neoliberal framework of the past thirty years. You can see it in Brazil right now. The "virtual senate" wants assurances that the neoliberal policies of the Cardoso government, from which foreign investors and domestic elites greatly benefit, will not be changed. As soon as international investors, lenders, banks, the IMF, domestic wealth, and so on, recognized that Lula might win the elections, they reacted with attacks on the currency, capital flight, and other means to place the country in a stranglehold and prevent the will of the majority from being implemented. When they regained confidence that Lula would not be able to depart fundamentally from the international neoliberal regime, they relaxed and welcomed him. As they put it, Lula reassured people that he would keep Brazil safe. That specific use of language has two faces: if he keeps it safe for the financial investors, will he keep it safe for the Brazilians? Governments face what economists call a "dual constituency": voters, and the "virtual senate." Lula promised his country that he will keep Brazil safe for the population, but the IMF wants to keep it safe for its own constituency: the "virtual senate." They will act so that the money comes right after the elections and only if Lula keeps up with creditors. This is the effect of financial liberalization and other measures that have established the "virtual senate" as the dominant force in determining social and economic policy within a country. It means the population doesn't have control of the decisions taken by his own country. One consequence of liberalization of capital is rather clear: it undercuts democracy.

[-] 1 points by MattLHolck (16833) from San Diego, CA 1 year ago

those that have they money determine what the jobs are

[-] 1 points by flip (6866) 1 year ago

pulled all the quotes out of your comments - can't handle it?

[-] 1 points by richardkentgates (3269) from Fort Walton Beach, FL 1 year ago

You edited your comment. No surprise there. Your bullshit might work in debate class but this is the real world, move along. I told you I'm done playing your game.

[-] 1 points by flip (6866) 1 year ago

so that is what happens when you show your ignorance and get called on it. and you showed that ignorance here -"This thread started inaccurately. The FED has never fought off inflation." - got called and didn't have the decency to say - you're right - i need to adjust my thinking. showed it again here - " Dude, if keynes was on the money, why are we still stagnating? Why is the fed still printing more money, almost 5 years later?" - what is happening today in the economy has very little to do with keynes - again you could get on google and educate yourself and then say thanks for pointing me in the proper direction so i don't misinform others - no you couldn't. this is what you are able to do - "obviously you are not a legitimate user either. I'm done paying your game, fuck off." and then we have this about andrew mellon - "NO idea who Mellon even is" - you have a blog - you write about the issues of the day i imagine - like economic issues and you don't know mellon or his very famous quote? you cannot engage is a civil dialogue unless you are agreed with? one more from keynes that might help you although it seems you are beyond help - a remark by John Maynard Keynes: “When the facts change, I change my opinion. What do you do, sir?” you were given facts that contradcited your opinion and what did you do - mr blogger or homie or dude - or is it mr legitimate user - and what is a legitimate user anyway. your turn to educate me - ows, right on brother - we are all for the 99% right - as long as i agree with you or at least do not prove you incorrect - over and over and over!

[-] 1 points by richardkentgates (3269) from Fort Walton Beach, FL 1 year ago

You quoted me for something I never said. You are so intelligent that you have the definition of basic economic terms backwards, but you know about Mellon. These are not accidents, they don't add up. Something you cannot learn in your obviously sheltered life, is recognizing a con. When you're poor, this is something you learn at an early age. Sucks to be you.

[-] 1 points by flip (6866) 1 year ago

this is why this site is a waste - this is not an educating conversation although it could be. egos etc seem to keep people from educating themselves - too many are trying to make silly comments that will get points from some sad sacks who vote up and down on this shit - and it is shit. the economy is at the heart of our problems today and very few understand it - discussions like this were what educated the populists - maybe you should learn about them and mellon! if they could do it we can too but you homie are not helping - and neither is this site i am afraid - too bad - we are heading towards a shit storm and too many here sit in front of their computer and stroke their own egos - can you see the shit storm coming - copper and oil in very short supply - getting harder and harder to dig out of the ground. the very bedrock of modern society and they are running out and you homie are talking about the wright bros. sorry you are unemployed - make yourself useful but first you must educate yourself

[-] 1 points by richardkentgates (3269) from Fort Walton Beach, FL 1 year ago

Relax, I wasn't siding with him, I was poking at your poor argument. That argument is common and it's flawed, as you now see.

[-] 1 points by flip (6866) 1 year ago

what i said stands sad to say

[-] 2 points by richardkentgates (3269) from Fort Walton Beach, FL 1 year ago

ah, nose in the air. it suits you.

[-] 1 points by richardkentgates (3269) from Fort Walton Beach, FL 1 year ago

A bunch of confused suits, no surprises there.

[-] 1 points by JesseHeffran (3903) 1 year ago

Richard, where can I find more information on this idea? It sounds interesting. But I must say in our current situation, I believe, it would not only be hard but would be revolutionary in scope. It would, as flip quoted, be like a shock to the system. It'd be hard because it would entail confiscating then destroying value, Ie money and assets. The fed Is good at creating money, or inflation, but when it cant keep on selling Bonds to siphon money from the system, deflation, it can only rely on government to confiscate. Or have I missed something?

[-] 1 points by flip (6866) 1 year ago

you are making less sense as this goes on

[-] 2 points by richardkentgates (3269) from Fort Walton Beach, FL 1 year ago

Because you do not understand the content you are sharing.

[-] 1 points by flip (6866) 1 year ago

that is one possibility - the other is that you are incorrect - start by correcting your lack of understanding like this - "The FED has never fought off inflation

[-] 2 points by richardkentgates (3269) from Fort Walton Beach, FL 1 year ago

Ok, I may have been exaggerating a bit. Allow me to clarify.

The FED has never intentionally allowed for deflation. I think they should. I think the gov should have focused on sustaining the poor and working class when the recession began, and allowed the market to self correct. The recession would have lead to deflation if left alone. Had the government focuses on it's people instead of the wealth, prices would have come down, which stimulates demand, and would have lead to hiring. In a year or two, employment would have picked up enough to end the recession. At that point, inflation would return to norm and prices would again begin to climb.

[-] 1 points by flip (6866) 1 year ago

you are paraphrasing andrew mellon (you are therefore speaking for the 1%) - He advised President Herbert Hoover to "liquidate labor, liquidate stocks, liquidate farmers, liquidate real estate… it will purge the rottenness out of the system. High costs of living and high living will come down. People will work harder, live a more moral life. Values will be adjusted, and enterprising people will pick up from less competent people." not sure if you are following ron paul but you do not understand the economy - inflation redistributes wealth which is why the rich hate it. start with "secrets of the temple"

[-] 1 points by VQkag2 (16478) 1 year ago

You are spot on Flip! I would add that the debt is republican created as a strategy to then state that we have to cut all these middle class programs, Austerity is the only way. This has been their plan for 30 years.

[-] 1 points by flip (6866) 1 year ago

you are right about the "starve the beast" plan but you know we disagree on blaming the gop completely. the elite that fund both parties are on board with the plan

[-] 1 points by VQkag2 (16478) 1 year ago

There are elite who fund both parties to blame. But some elite who fund the Dems are not hoping for ending SS, Medicare, Unions, for one.

In any event this debacle could not occur with Dems betraying progressive principles. I am more profoundly disappointed with those than any repub who I always expect to serve the 1% plutocrats.

In terms of pols I prefer Sen Sanders type progressives. Elect more like that and vote out the pro 1% pols and we will be in good shape.

[-] 1 points by richardkentgates (3269) from Fort Walton Beach, FL 1 year ago

NO idea who Mellon even is. I don't paraphrase, it's tacky. I also have said nothing about liquidating labor. I must have said something that scares you because now you're just spinning and trying to discredit me instead of my argument.

[-] 1 points by VQkag2 (16478) 1 year ago

I support raising wages. That should definitely be a part of our recovery plan. Deflation we discussed. Seems unlikely to happen. but good louck with that.

[-] 1 points by VQkag2 (16478) 1 year ago

Oh well. guess we have to agree to disagree.

What does it mean close the gap between wages and inflation? And how is it done?

[-] 2 points by richardkentgates (3269) from Fort Walton Beach, FL 1 year ago

raise wages or allow for controlled deflation, or a little of both.

[-] 1 points by VQkag2 (16478) 1 year ago

I don't mean just road work. I think the road could be 2 years, there is also a new electrical grid, a new internet grid, a bullet train system, Airport upgrades, There is so much we must do.

But outside of that.

We must cut taxes/debt for the working/middle (the real job creators) class. This will also increase demand, and result in more hiring.

[-] 2 points by flip (6866) 1 year ago

it is well known what needs to be done - we need to fix our crumbling infrastructure and build an energy system for the future. the water system is 100 yrs old in much of the country. the electrical grid is out dated and the roads and bridges are is terrible shape. all of these things and more need to be fixed and would provide the basis for a better society in the future and at the same time provide jobs for people today. trains use 1/40th the energy of trucks hauling cargo - there is lots of work that would provide jobs and at the same time save energy and money down the road. this is what any good keynesian could tell you but our political system is so focused on debt that we cannot see the obvious. seems to me that part of the program for ows should be to educate the population about these matters. the economists will not do it - they are in the pocket of the rich. we need a resurgence of the populist era - those dirt poor farmers educated themselves about money and debt and almost changed the country - they came close - we need to finish the job!

[-] 1 points by richardkentgates (3269) from Fort Walton Beach, FL 1 year ago

I don't prescribe to tax cuts, for anyone. I prescribe to closing the gap between inflation and wages so workers can afford to help pay for the country they live in. Participatory democracy.

[-] 1 points by VQkag2 (16478) 1 year ago

I think hiring is the solution. I think we should make the effort. I know republicans have prevented that effort.

Let's give it a shot. Who knows maybe the world won't end! It might be a self promoting action. More hired, more demand, more hired, more demand.

Makes sense.

[-] 1 points by richardkentgates (3269) from Fort Walton Beach, FL 1 year ago

The work has to be done anyway, it's overdue. It alone will not solve anything in the long term. by long term I mean 2 years.

[-] 1 points by VQkag2 (16478) 1 year ago

Isn't the slow recovery a result of republicans obstructing the Pres stimulus (keynesian) plan?

[-] 1 points by richardkentgates (3269) from Fort Walton Beach, FL 1 year ago

No. It's stagnate because there has been no effort to close the gap between inflation and wages. Demand is low. Hiring a bunch of road workers and the like is an attempt to bring demand up to the current level of inflation. This could be a temp fix but once the work is done, and it will not lest forever, inflation will be even higher and wages will decline against that rising inflation. Then we will have to deal with this all over again.

[-] 1 points by flip (6866) 1 year ago

time to educate yourself - and others - i assume you want to help - one way would be to give it up when the facts don't support your argument. keynes is still on the money (pun intended)- google keynes money in bottles and you will see what he knows - and what you know!

[-] 1 points by richardkentgates (3269) from Fort Walton Beach, FL 1 year ago

Yes, it's working out just lovely, can't you see? Dude, if keynes was on the money, why are we still stagnating? Why is the fed still printing more money, almost 5 years later? Why are we only going to have 1.9% growth (if we are lucky) this year and not much better if at all, next year. The FED is all over keynes philosophy right now, like white on rice. I'm less than impressed.

[-] 1 points by flip (6866) 1 year ago

you have no idea of who andrew mellon is? time to educate yourself - even though you did not mean to paraphrase him you did - you are advocating the same thing even if you do not know it. this is what you said - "The recession would have lead to deflation if left alone. Had the government focuses on it's people instead of the wealth, prices would have come down, which stimulates demand, and would have lead to hiring. In a year or two, employment would have picked up enough to end the recession. At that point, inflation would return to norm and prices would again begin to climb" - that is what mellon advocated. of course how demand would pick up with more people out of work is unclear - it did not work in 1937 and willnot today! you are playing the gop game plan - you need to read about keynes and the depression - your advice did not work then - government spending ended the depression - lots of it!

[-] 1 points by richardkentgates (3269) from Fort Walton Beach, FL 1 year ago

Fuck keynes. We don't live in those times either. deflation does not automatically mean unemployment. You're going off the deep end. Deflation is not automatically catastrophic, you're being Mellondramatic, pun intended.

[-] 0 points by notaneoliberal (2269) 1 year ago

No Richard, inflation does not "maintain investor profits". You have that one entirely backward. Inflation tends to be to the advantage of debtors, and to the disadvantage to creditors, except in the case of adjustable rate loans. Deflation, by definition, means; an inadequate supply of money to represent the goods and services in the economy. Deflation causes the economy to freeze up.

[-] 1 points by richardkentgates (3269) from Fort Walton Beach, FL 1 year ago

No sir, the evidence does not support that claim. Show your work.

[-] 1 points by notaneoliberal (2269) 1 year ago

The article below gives a pretty good explanation of who wins and who loses in a state of moderate inflation. Note that we aren't talking about so called "hyper-inflation", a phenomenon that, so far, has never occurred in the US. The crux of it is, if you owe a debt, (fixed rate) you pay it off with "cheaper" dollars. If you are invested in fixed rate bonds, CDs, etc, you lose. http://www.bankrate.com/finance/investing/winners-and-losers-if-inflation-skyrockets-1.aspx

[-] 1 points by richardkentgates (3269) from Fort Walton Beach, FL 1 year ago

If you get your money via labor, when inflation rises your paycheck stays the same and prices go up.

[-] 1 points by notaneoliberal (2269) 1 year ago

That can happen, but in times past, cost of living raises were the norm, as well as increases in the min. wage (pre - Reagan). My opinion as to why stimulus has been ineffective is that it has more to do with the fact that much of that money got off shored, along with our jobs. The Fed cannot set trade policy. That is the job of Congress. See what you think of this article. http://economyincrisis.org/content/americas-descent-into-poverty