tag:blogger.com,1999:blog-6399730406480392183.post478213818877159392..comments2024-03-27T11:18:34.222-03:00Comments on Viable Opposition: The Federal Reserve Plays the Blame GameA Political Junkiehttp://www.blogger.com/profile/03342345936277964422noreply@blogger.comBlogger11125tag:blogger.com,1999:blog-6399730406480392183.post-82071777787001794242014-11-24T12:22:37.948-04:002014-11-24T12:22:37.948-04:00Fed is buying S&P futrues big time....the plan...Fed is buying S&P futrues big time....the plan is to double downAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-6399730406480392183.post-27640040784589118412014-09-18T20:21:01.311-03:002014-09-18T20:21:01.311-03:00You mean it took the FED this long to figure out &...You mean it took the FED this long to figure out "trickle-down" doesn't work from the FED any better than it does from government?<br /><br />We've been operating on this same failed economic approach for 35 years with the same failed result for our standard of living and median wages.<br /><br />If the FED had pulled 5 random guys from the street and said:<br /><br />We're going to do this:<br />1 - give billionaires lots of money<br />2 - ???<br />3 - higher wages.<br /><br />They would tell you step 2 is a lie, and step 3 didn't happen the last 35 years they've been trying it!Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6399730406480392183.post-21465825880925767582014-09-18T18:20:22.695-03:002014-09-18T18:20:22.695-03:00Thanks back.Thanks back.A Political Junkiehttps://www.blogger.com/profile/03342345936277964422noreply@blogger.comtag:blogger.com,1999:blog-6399730406480392183.post-32813169401223605542014-09-18T14:09:31.955-03:002014-09-18T14:09:31.955-03:00I really appreciate your comments PJ. It shows you...I really appreciate your comments PJ. It shows your character to consider a position different than your own. When I was a university student, I held all of the same positions as you do. Yet, what I have come to understand is that for economic policy to be truly feasible, incentive structures must be implemented to offset or mitigate particular behaviours (rather than arguing about the validity of systems). <br /><br />As for your parent’s generation, their incentive structure supported responsible management of finances. There were few (if any) social safety nets at that time, so over-extending oneself financially may have resulted in literally starving to death. Thus, with the post-war societal transition towards the leftist nanny-state (financed by the explosion in wealth and technology) and the implementation of many social programs, incentive structures completely shifted in the other direction. As you state, the US became a consumer driven economy. The American Dream can be very expensive, and this fact is evidenced by the emergence of consumer debt. Societal values shifted towards immediate gratification and self-entitlement. <br /><br />Therefore, I take notice of those that argue from particular economic/political slants. Is it not the case that the US government is “of the people, by the people and for the people”? This essentially means the government is a sample size of the general electorate; thus, their own motivations, predilections, ambitions and incentive structures mirror society at large. If we hate the government for their ineptitude and bias towards their own personal agendas, then we must also hate ourselves for the same reasons. If we hate bankers for being corrupt and greedy, so too must we hate ourselves for the same reasons. If we hate unions for inefficiency and collusion, so too must we hate ourselves. Etc, etc. After all, each is comprised for and by people.<br /><br />Lastly, when individuals start thinking in theses terms, a more meaningful discussion can take place as to policy changes that will benefit society as a whole, rather than the vitriolic nonsense of democrats vs. republicans or liberals vs. conservatives vs. socialists, or Keynesians vs. Hayek’s etc. <br /><br />Thanks for your time and consideration PJ.<br /><br /> <br />Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6399730406480392183.post-1705907512255865192014-09-17T20:21:29.644-03:002014-09-17T20:21:29.644-03:00Points well made. I guess I took exception to the...Points well made. I guess I took exception to the Federal Reserve pundits blaming the failure of their experimental policy (and it really is an experiment since it is unprecedented in central bank history short of Japan's experience which has also been a failure) on Main Street.<br /><br />It's funny when you look back to the generation that went through the Depression. My parents where chronic savers; paid off everything, rarely even used a credit card. That generation held off on buying things until they either REALLY needed them or could REALLY afford them. My suspicion is that if the Baby Boomers had looked at debt with the same view, the economy would not be in the condition that it currently is in. Unfortunately, in our consumer-driven economy, it seems more important to have the appearance of wealth than to make the sacrifices necessary to make one truly monetarily wealthy. Or, as you would put it, changing the human condition.<br /><br />Thanks for your input. I guess I just have a bit of a bug where the sun doesn't shine when it comes to central bankers who do everything in their power to cajole us into spending because that's the only way that the economy grows.A Political Junkiehttps://www.blogger.com/profile/03342345936277964422noreply@blogger.comtag:blogger.com,1999:blog-6399730406480392183.post-61903578560531324782014-09-17T19:24:51.646-03:002014-09-17T19:24:51.646-03:00PJ, I have been reading your posts for quite some ...PJ, I have been reading your posts for quite some time as I quite enjoy your dedication to analysis. Nevertheless, have you ever wondered why those that promote austerity versus Keynesian deficit spending will never definitively prove their arguments? Even economists (of which I incidentally have an Hons degree) that have dedicated their entire academic careers on such matters will never come to a consensus regardless of the quantitative data points that supposedly expound their respective causes.<br /><br />I contend the reason for this is predicated on a primary condition; namely, the human condition. Thus, in relation to my previous comment about the futility of "blaming" the Fed while not applying the same rigorous analysis towards "individual consumers" renders your analysis one side short of incontrovertible. Much the same of leftists that contend that bankers are the bane of society and that they only look to maximize their financial positions. Objectively PJ, is this different than ANY worker or industry that endeavours to maximize their position? PEOPLE are greedy plain and simple. Regardless of their job, education, race, sexual orientation, political slant, social position etc. Each tries to maximize their utility indiscriminately. <br /><br />Here's a thought experiment for you: suppose one was able to change the strategy implemented by the Fed moving forward. No more debt accumulation. Now how do you suppose this will make any difference on Main St when the average American lives beyond their means? So the Federal Government is solvent, but the average American is drowning in personal debt. And not because they "don’t have enough to make ends meet", but rather, because they spent on goods and services that they should not have purchased. Their children really "needed" that second iPad, and flat screen TV in their bedroom etc. Does this fiscal change by the Fed really amend society? Who might one blame now? <br /><br />Political pundits and economists alike take a top-down approach when dealing with this subject matter. They blame the system when they should be taking a bottom-up approach and hold people accountable first. Is it not the case PJ that the Fed, Democrats, Republicans, bankers, central bankers and industries, unions are comprised of PEOPLE? Thus, what difference will a change in the system make when it is people’s behaviour that underpins all political systems? <br /><br />The bottom line is that you can change the “system”, but I can assure you that the outcome will always be the same, unless changes to counter the human condition are implemented. <br />Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6399730406480392183.post-2987902537790600012014-09-16T19:38:10.428-03:002014-09-16T19:38:10.428-03:00And that's why the Fed blames us!And that's why the Fed blames us!A Political Junkiehttps://www.blogger.com/profile/03342345936277964422noreply@blogger.comtag:blogger.com,1999:blog-6399730406480392183.post-40014524591502725062014-09-16T19:37:24.336-03:002014-09-16T19:37:24.336-03:00Exactly.Exactly.A Political Junkiehttps://www.blogger.com/profile/03342345936277964422noreply@blogger.comtag:blogger.com,1999:blog-6399730406480392183.post-21628917414562881422014-09-16T19:08:28.119-03:002014-09-16T19:08:28.119-03:00I think it unfair to solely blame the Fed as it is...I think it unfair to solely blame the Fed as it is the human condition and society at large that led to this mess. The so called "American Dream" and all it's great expectations, not only applied to individuals but to society and government as a whole. Just as individual consumers assumed toxic levels of debt to finance family trips to Hawaii, 10 plasma TV's and Hummers; so too did the US government amass toxic levels of debt to fund social programs, wasteful defence spending etc. Just as individual consumers purchasing behaviour kept kicking the debt can down the road via mortgage refinances and increased limits on credit cards; so too did the US government increase debt ceilings and expand bond buying programs. Ultimately, this whole conversation is about entitlement to (personal AND government) conspicuous consumption. <br /><br />Individuals tend to assume that government agents are not bound by the same behavioural constructs as everyone else. They would assume incorrectly. <br /><br />Therefore, to blame the Fed, whilst letting individual consumers off the hook, offers a myopic position on a pertinent subject.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6399730406480392183.post-32099997868129903392014-09-16T18:08:39.170-03:002014-09-16T18:08:39.170-03:00How elitist can the Federal Reserve be?
The bottom...How elitist can the Federal Reserve be?<br />The bottom 80% are not hoarding money, for they have little excess to hoard.<br />The demand is not there to satisfy the supply of dollars, so inflation is low.<br />To actually put its stupidity in writing takes a lot of guts!<br />Don LevitDon Levithttps://www.blogger.com/profile/02497731736648561272noreply@blogger.comtag:blogger.com,1999:blog-6399730406480392183.post-60965187398036040192014-09-16T13:28:08.511-03:002014-09-16T13:28:08.511-03:00I think M*V = P*Q is not a true statement. My ques...I think M*V = P*Q is not a true statement. My question is who are the hoarders? Is it not stocks that have gone sky high for no real reason? These are questions not scarcasm statements. I was under the impression that all the money printing was what is driving up the stock markets, is that not the case?Anonymousnoreply@blogger.com