Alternatives aplenty | 115 comments (115 topical, editorial, 0 hidden)

Re: The Assertion of Absurdity (none / 0)

No, that's a general statement, not one specific to the current situation:

If you have a Treasury with a drawer full of shovel-ready, useful infrastructure projects, then the Treasury can shoot the private banking sector in the back of the head, dump the corpse in a shallow grave and nothing excessively bad will happen (except maybe a coup d'etat), irrespective of where you are in the business cycle.

Because with sufficiently activist fiscal policy, you get to abolish the business cycle.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Thu Nov 3rd, 2011 at 12:17:05 PM EST
[ Parent ]

Re: The Assertion of Absurdity (none / 0)

Not without replacing it in some form. Attempting to make all financing decisions to be made throughout a modern monetary production economy at the level of national fiscal policy quickly runs into information overload.

We need a banking system so that the fiscal authority can concentrate their attention on those tasks that a banking system cannot or should not be doing.

I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.

by BruceMcF (agila61 at netscape dot net) on Thu Nov 3rd, 2011 at 02:52:52 PM EST
[ Parent ]

Re: The Assertion of Absurdity (none / 0)

Obviously you'll need to recreate it. My point was that you can paper over any temporary disruption for a potentially indefinite period with fiscal policy.

Not that you would want to do it unless your banks needed a lead pill delivered intercranially for other reasons.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Thu Nov 3rd, 2011 at 08:38:50 PM EST
[ Parent ]

Re: The Assertion of Absurdity (none / 0)

Then you aren't shooting the whole private banking sector in the back of the head and burying it out back.

Obviously we could shoot all the TBTF banks in the back of the head, and so long as we did it by taking them into receivership long enough for people to shift their accounts to small community banks and credit unions, there wouldn't be any massive calamity in the short term, and in the long term we'd be better off.

But shooting the entire private banking sector in the back of the head and having to recreate the entire sector from scratch ~ that seems likely to deepen the current depression.

I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.

by BruceMcF (agila61 at netscape dot net) on Fri Nov 4th, 2011 at 01:10:26 PM EST
[ Parent ]

Re: The Assertion of Absurdity (none / 0)

True, I'm not shooting the whole private banking sector. Only as much as is required. The point I was trying to make is that there is no magical upper limit to how large a share of the function of the private banking system the state can take over if it needs and wants to. How much you want to take over depends on how corrupt the different sorts of banking are in your country. And how corrupt the civil service is, obviously.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Sat Nov 5th, 2011 at 06:28:13 AM EST
[ Parent ]

Alternatives aplenty | 115 comments (115 topical, 0 editorial, 0 hidden)

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