quote:
but anybody that thinks it would be a "good" thing to shut down the Fed truly has no idea what the Federal Reserve does, especially in the past several years.

What do they do that is so good?

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Would an economy be stronger and less volatile with or without central banks? The answer to this is without a doubt, with. Monetary authorities are the only people that have made actual proactive decisions since 2006, and saved us from going completely down the tube.

I read your post in that thread. I disagree with your assessment of Ben, but I readily admit I'm no expert. It seems, though, that you're praising Ben and blaming government. Why not accept the reality that both are related and that thinking in some theoretical central banking model is not realistic, and perhaps a bit utopian?

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on a higher level the central bank is the biggest reason the US has been able to grow and raise our standards of living in such a rapid manner since 1950.

ok...but...

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The problem was that standards were raised higher than the "intrinsic" value of the average American.

I agree...

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This was partly to blame on central banks

finally!

oh wait....

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but also partly to blame on fiscal regulation and the majority of blame is saved for society.

damn.

This post was edited on 12/3/12 at 5:51 pm

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Posted by BennyAndTheInkJets

Middle of a layover

Member since Nov 2010

5611 posts

Posted on 12/3/12 at 6:04 pm to WikiTiger

quote:
What do they do that is so good?

See the above post. In normal circumstances they smooth out economic cycles. In unusual circumstances (the past 4 years) they can save the system from disaster.

quote:
Why not accept the reality that both are related and that thinking in some theoretical central banking model is not realistic, and perhaps a bit utopian?

The fiscal side still holds onto the old academic models. Trust me when I say this, the Fed has many, many models that they use. None of them are "ivory tower" models that are created in academia without real world testing.

In terms of you blaming central banks, I'm not exactly sure why you feel the need to point a finger at the only institution that actually saved us when things really went bad. What you can blame on the Fed is keeping rates way too low during the 90's and early 2000's. You can blame fiscal authorities by allowing banks to make loans to, in essence, anybody. You can blame banks for taking on too much risk. But the end blame has to be placed on society, because in essence if you refuse to do that you're not blaming the biggest underlying cause.

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