Capitalism In Crisis & A New Approach To Mainstream Econ

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Riddick
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Capitalism In Crisis & A New Approach To Mainstream Econ

Post by Riddick » 04-02-2015 03:36 AM

Financially complex capitalism is inherently unstable. Under conditions of stability, firms and households will, over time, move from a position where their income pays off their debt, to one where it can only meet the interest payments on it. Finally, as instability rises, and central banks respond by expanding the supply of money, people end up borrowing just to pay back interest. The price of shares, homes and commodities rockets. Bust becomes inevitable.

This logical and coherent prediction was laughed at until it came true. In the wake of 2008's global financial meltdown – which threatens some countries with a phase of stagnation lasting decades – the policymaking elite face a problem. They are desperately trying to wrestle the economy back into a state where their models can cope with it again, using measures mainstream theories say are not needed: quantitative easing, bank nationalizations, partial debt defaults and currency devaluations.

Basically defenders and critics of orthodox economics are asking, “What does capitalism normally look like?” One side says “stable”, the other “unstable”. The right question is: Where are we in the long arc of capitalist development? But that question goes to the heart of darkness. Was the meltdown the last in a series of shocks necessary to allow a 3rd technological revolution to take off? Or was it evidence capitalism’s tendency to reshape in response to technology has stalled, or is even finished?

With each boom-bust cycle more violent than the last and the system too complex what's needed is not a new orthodoxy, cobbled together from critics and remnants of mainstream thought so bankers can construct trading models to iron out problems created by the way our brains work, but instead something larger that encompasses capitalism’s current crisis within an understanding of its destiny.

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Post by Doka » 04-02-2015 11:33 AM

Good article Riddick , I put my "rant" on another thread. It drives me nuts, the people think good jobs and good pay come from the "tooth fairy" or worse , the government, who has to take from you, to keep it's self alive. :confused:
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Post by kbot » 04-03-2015 10:46 AM

From the article:

"Finally, as instability rises, and central banks respond by expanding the supply of money, people end up borrowing just to pay back interest. The price of shares, homes and commodities rockets. Bust becomes inevitable."

Isn't this what those who oppose central banks (from Jefferson to Jackson to JFK) feared - that eventually central banks would do what central banks do, which is control the currency in order to enrich and eventually save themselves?

And, in the process, trash a country........
What the hell are we fighting for? Ah, just surrender and it won't hurt at all. You just got time to say your prayers. Yeah, while you're waiting for the hammer to fall. (Brian May of Queen)

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Post by fos » 04-05-2015 01:28 PM

Money should be anchored to something that has value such as gold not simply printed at the whim of the central banks. Not only do central banks print money, they are producing virtual money by digital manipulations and changes in each bank's reserve requirements.

All of these manipulations will ultimately cause major problems. Personally, I think it is too late to avoid a fall.

Incidentally, Harry Reid set off the fall in 2008 by announcing a pending bank failure to secure a Democrat win. The fall was also caused by governments demand that banks issue mortgages to individuals that could never pay them back, producing the mortgage debacle.

Government spending other peoples money.

fos

PS. Reid is an evil man that believes the end justifies the means, a sentiment that is rampant in the Democratic party.

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Post by Doka » 04-05-2015 05:41 PM

Oh ya, Good old Harry kept both houses of congress frozen all these years, nothing in nothing out. Perhaps he will get his "just" reward. Karma is very patient.
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Post by kbot » 04-06-2015 06:10 AM

fos wrote: Money should be anchored to something that has value such as gold not simply printed at the whim of the central banks. Not only do central banks print money, they are producing virtual money by digital manipulations and changes in each bank's reserve requirements.

All of these manipulations will ultimately cause major problems. Personally, I think it is too late to avoid a fall.

Incidentally, Harry Reid set off the fall in 2008 by announcing a pending bank failure to secure a Democrat win. The fall was also caused by governments demand that banks issue mortgages to individuals that could never pay them back, producing the mortgage debacle.

Government spending other peoples money.

fos

PS. Reid is an evil man that believes the end justifies the means, a sentiment that is rampant in the Democratic party.


Not to mention that The Fed actually charges the American taxpayer for the creation and use of its own currency.

In this, I agree with you fos, I think that it's too late - a fall is inevitable under our current system. Not being one of those who have gone out an hoarded gold or silver, I think I'm in the same boat as just about everyone else.

As Betty Davis said.......

What the hell are we fighting for? Ah, just surrender and it won't hurt at all. You just got time to say your prayers. Yeah, while you're waiting for the hammer to fall. (Brian May of Queen)

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Post by Riddick » 04-07-2015 01:53 AM

kbot wrote: Not to mention that The Fed actually charges the American taxpayer for the creation and use of its own currency.
What especially sticks in my craw is taxpayers footing the bill for bailing out businesses and financial institutions considered "Too Big To Fail". Bigger than ever today they've come out like bandits, while its fortunes still at pre-2008 levels the working class has seen only scant returns on its investment -

The table is tilted, the system is rigged. Freed from fear over criminal prosecution, the Wall Street/K Street cabal is comfortable in its impunity. Being instigated by them, the inevitable meltdowns are no big deal for them, so long as the public's willful ignorance of being screwed on a daily basis abounds.

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Post by kbot » 04-07-2015 05:38 AM

Yeah. Who knows. Maybe some day the people will rise up and actually DO SOMETHING and take back the power that they've just given away.

What the hell are we fighting for? Ah, just surrender and it won't hurt at all. You just got time to say your prayers. Yeah, while you're waiting for the hammer to fall. (Brian May of Queen)

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Post by fos » 04-07-2015 05:15 PM

The government has too many guns for the people to actually rise up....

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Post by kbot » 04-08-2015 11:09 AM

fos wrote: The government has too many guns for the people to actually rise up....


And then we had this remark on today's news cycle.......

Snippet:

In recent remarks to the Senate Banking Committee, Federal Reserve Chairwoman Janet Yellen was her typical evasive and non-committal self when the topic of interest rate hikes were broached. When the subject of potential oversight of the Fed came up, however, Ms. Yellen became quite forthright in her response.

When asked about a bill introduced by Kentucky Senator Rand Paul to “Audit the Fed,” Ms. Yellen declared: “I want to be completely clear: I strongly oppose ‘Audit the Fed.’” Ms. Yellen defended her position on the grounds (which have been given by every previous Fed Chairman) that oversight would lead to politicized monetary decision making, thus compromising the central bank’s “independence.”

http://www.westernjournalism.com/dont-a ... bolish-it/

In other words -
"Keep the government out of the bank's business..."

The Fed SHOULD be audited. We the taxpayers are PAYING for everything connected with The Fed.
What the hell are we fighting for? Ah, just surrender and it won't hurt at all. You just got time to say your prayers. Yeah, while you're waiting for the hammer to fall. (Brian May of Queen)

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Post by fos » 04-08-2015 11:14 AM

Why should any entity authorized and established by our country be beyond oversight and an audit?

Why should the Federal Reserve be untouchable?

If anyone believes they are apolitical, they are hiding their head in the sand.

fos

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Post by Riddick » 04-08-2015 05:35 PM

In Related News: Could Silence Signal Cold Feet?

"Audit The Fed" Left Unsaid In Rand Paul Rollout Rant
Announcing his presidential candidacy Tuesday, in his broadsides against “the Washington Machine,” the Kentucky senator made no mention of the Federal Reserve or auditing its monetary policy.

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