Richard Alford: Counter-Cyclical Follies

rcwhalen's picture

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RockyRacoon's picture

Yeah, and I'd like a pony...

Is there any serious person in a position of authority who does not already know this?

Not that it matters much.

Savings must drive investment, not "financial instruments", so interest rates must rise to allow that to happen.   That makes the situation untenable.

Simplistic, yes, but so is economics at its basic working level.

Nevermind's picture

Is it that complicated? Capital flows to its most efficient use. Our economic competitors can produce goods and deliver services cheaper, which has produced structural changes and a living standards convergence. Add in that central bankers think that banking functionality drives economic growth instead of economic growth sustaining the banking system. 

Not to mention the spending on 2 1/2 wars while the central bankers and SEC were asleep at their posts...



sasebo's picture

All the stupidity will end when there is nothing to eat on the useless panjandra's breakfast table and they are replaced with those dedicated to America's long term viability & of an Austrian School bent. And not a minute sooner. 

Zero Govt's picture

"Policymakers and elected officials must demonstrate leadership and institute policy responses aimed reducing the imbalances and unsustainabilities."

They could start with the budget deficit. If they manage that, which i doubt given these clowns track record, they can come round for coffee and we'll address the 10 Ton Elephant in the room, the national debt

JustACitizen's picture

That was a whole lot of b.s. to say that the current "structure" does not work - and will not work.

How about this: A "Free Trader" will always lose to a "Mercantilist" with an industrial policy.

Ivory Tower Idealists and the many people who accept "dogma as scripture" are a danger to the nation. It would be nice to see "realism" come back in fashion.

Reese Bobby's picture

How about this:

Don't hand control of your money supply to private banks,

Don't unionize your education system,

Don't allow donations to political candidates,

Don't eliminate God from public society when the founding document put Him front and center,

Don't open your borders to unlimited people who do not have to assimilate into "Americans."

Don't destroy your manufacturing base via lopsided free trade agreements.

I could go on and on...Simpler version would be, "Love thy neighbor."

Bartanist's picture

They will never be able to do it... or for that matter they will never want to do it. For it to be effective, there would have to be:

1. equal protection under the law (the little guy in the right can't always get crushed by the big evil b*stard)

2. a reversal of the consolidation/monopoly mentality where big always wins and if they don't then they just buy the little guy or lobby congress to have him legislated out of business. There needs to be much more competition and so the giant corporation growth paradigm has to be broken.

3. a reduction of governmental regulation, paperwork, overhead, taxes of every sort and financing that discriminates against the small company (like the idiotic Durbin food bill that puts farmstands out of business ... for the benefit of Monsanto). I am not saying create a freeforall economic nightmare, but handle bad behavior that causes actual provable harm in civil courts and not with a regulatory strangle hold.

4. to most importantly flip the method of population control in this country from fear back to hope (only two ways to contol a population) and this will hurt the advocates of our fascist oligarchical CIA/NSA/Bilderberg/Zionist/Bankster blah, blah, blah government. The obvious solutions are to gut the federal government of power and incentive to create wars and fear and put power back in the hands of the states, local governments and people. Will the fascist *holes agree to this? Heck no ... so it is a non-starter. I do not believe that there is any way to make a centrally controlled fascist state into a balanced economy... people just don't give their effort because there is no point. The best choice if one want to prosper in such an environment is to suck up to the government (official or unofficial)... and how many jobs does that create?

RockyRacoon's picture

Your solutions are even more basic and I can wholeheartedly agree with the direction of your comment.   The situation doesn't seem to permit the wholesale reconstruction of government and the elimination of fraud and bribery that now exists.   A complete and painful reset would be the only way to institute your reforms.   Count me in.

bigwavedave's picture

i thought this was a good peice and pretty much gets to the heart of the matter. To wit; Yanks just aint worth what they think they are.

ceilidh_trail's picture

bwd- Never mind the fact that us "Yanks" invent most of the stuff you people use "over there"...

Reese Bobby's picture

I didn't know there were two Bill Dudley's because this article can't be talking about the Squid alum who runs the NY Fed, can it?  Janet Yellen?  The only person by that name I can think of is Vice Chair of the Fed.  Wait a minute...this is a joke!  The best ones often take a while to get.  VERY FUNNY.  "They wrecked it on purpose but are now going to fix it!"  HA HA HA HA HA HA HA HA....

geno-econ's picture

Agree US trade policy in a global economy is  major cause of our current problem, but notice the pussy foot language calling for some ill-defined trade remedy bordering on protectionism but not really.  Typical economist linguistic ambiguity. Most of the other pontification is not actionable and therefore a nice academic exercise , but wortheless. Meanwhile Bankers, Wall St and multinationals are gaming the system but leaving other Americans  behind to fend for themselves along with worthless economists without the courage to come up with  concrete solutions.  After the collapse they may become more courageous.

TimmyM's picture

It is a lot fucking more simple than all that. Cut government by about 70%. Cut taxes by nearly as much. People would thrive-Hello!