Korean Job Discussion Forums

[mises]

[ChopChaeJoe]

How does this little blurb apply to the federal Reserve system and the gold standard? Again, you're posting random articles in lieu of presenting a case.

[visitorq]

[ChopChaeJoe]

Let's set aside pollyanna-ish ideas that at one time our government was this pure object unsullied by private interests. Looking at the economic history of the US pre and post 1913, i see more stability after. In terms of ground-level reality it would appear that the Fed, despite some bonehead moves, has contributed to more, not less, stability. There are still booms and busts, that's part of a capitalist system, and the Fed is going to make some bonehead moves, but overall we've seen more economic prosperity and American power since than before. So far, no one has penetrated this point. I'm not an unreasonable person, and I've changed my mind several times during my lifetime, but on any position outside of th mainstream, if you want to convince someone you'll need to have a persuasive argument, not simply rely on sandbagging from those who share your faith. Folks parrot anti-establishment propaganda too.

A word to the wise, there are polite ways to have a discussion.

[Old Gil]

The Fed was created after the three great boom and busts of the 19th and early 20th Century and presided over the worst economic crisis in history some 15 years after its creation, one that only recovered after a massive public works project in the form of WWII. I wouldn't say that it has had a stellar track record of catastrophe avoidance but it was instrumental in preventing the 1981 dip from getting much worse.

[mises]

The Fed was created in 1913. Depression in 1921. Then the Great Depression (after a Fed created credit boom). Then Bretton Woods (dollar exchangeable for gold). Then stability. The US could print and expand credit and other states absorbed it. Then Charlie in France got pissy. Then Bretton Woods 2 (pure fiat). Stagflation. Then Paul and rates in the teens. Super bubble since. Still going.

That is to say, the period that there was stability there was also a currency exchangeable for gold. Since that has been gone, it has been an escalated boom/bust (that is speeding up). When the bust, lower rates and push it forward. Then, the problems are built in. Do that for 30 years and you get today, which ain't over by a long shot.

Further, the Fed was created with a dual mandate:

1) price stability (ha ha)
2) full employment (would be funny, if not so horrible).

Further further, the Fed is not the first central bank in the United State. The other central banks also created stronger boom and bust cycles. And wages stagnant since Bretton Woods 2. And the middle class struggles to afford a house (houses are worth what banks are willing to let people pay for them, and what the banks are willing to lend depends on what the Fed is doing). This has hollowed out the middle class. Frankly, it might be over. The banks. Own. Everything. Drive around any neighborhood. 75-85% of all houses have a mortgage against them (according to S&P). That means the banks own them (ownership is control). The banks own everything. They drive up asset prices by directing credit and extract rents from people who can't afford to buy so must borrow to buy.

Classical economics struggled with one central question: How to undo Feudalism. Neo-classical/monetarist/Keynesian economics is bringing Feudalism back.

[visitorq]

[ChopChaeJoe]

Well, you started a coherent argument (although I'm guessing 40 hour weeks would have been heaven back then) and then slipped into conspiracy zone. Standard Oil and the Chicago meat cartels had pretty much consolidated by 1913.

[visitorq]