“Things the Federal Reserve Might Try if It’s Desperate”

Last week, Paul Krugman began his op/ed with one of the best leads he's ever written:

Four years ago, an academic economist named Ben Bernanke co-authored a technical paper that could have been titled “Things the Federal Reserve Might Try if It’s Desperate” — although that may not have been obvious from its actual title, “Monetary Policy Alternatives at the Zero Bound: An Empirical Investigation.” [NYT]

A compelling start to an important article. Read the whole thing.

Comments

[SanderO]

The Federal Reserve Bank is very much a part of the problem. it is run by private international bankers answerable to no one but themselves.

They manipulate the economy of the US and increase the wealth of these bankers by inflating and deflating the money supply.

We need to abolish fractional lending of banks which create money out of thin air and hence make our economy credit driven.

The Fed concept was to swing the economy in gentle cycles to control inflation and recession. It ain't working.

[Loren]

Is there a link to the article that doesn't require a paid login to the NYT?

[Loren]

Sorry to double post, but for those who are interested, here's a link to a version of the article that is readable without a login:

http://www.spiegel.de/international/0,1518,541438,00.html

[DJA]

Um, you don't have to pay to read the NYT online. Accounts are free, or if you don't want to give them any personal info, use bugmenot.com.

[Cass]

Scott Horton (q.v.) has a good post today on the economic situation, and a piece by Alan Greenspan in which he states the current mess is the worst since World War II. (Sounds to me like he's avoiding bringing up the 1930's.)

http://www.harpers.org/archive/2008/03/hbc-90002661

"Is it pure coincidence that Eliot Spitzer falls just as he is masterminding an effort to address lending abuses, as the Bush Administration is feverishly maneuvering to block him in order to protect the misbehaving lenders? Probably. But this will make excellent material for a thriller."

Indeed. In the meantime, it looks as though we might be on the verge of the collapse so many have been predicting the last few years.

[shrimplate]

It sounds to me like the Fed is floating $400 billion in loans and accepting a bit of The Big Shitpile as collateral.

Look! Over there! A new war!

[Lesley]

I know squat about economics, but do you think any of this would have happened if Bush hadn't been in power? So many things have gone wrong and there's so much corruption in this administration, I'm just wonderin'.

[PFT]

The solution is simple. Congress has the power to create money. Have them issue money directly to those who need it, call it Amerobacks (like Lincolns Greenbacks). This money can be created, and does not need to be borrowed. As Thomas Edison said, if a government can issue 30 billion in bonds, it can issue 30 billion in currency. Banks would need to accept the money in different deposit accounts that bear no interest, and can not be multiplied by 10 like the Feds fractional reserve system allows.

I am thinking like, maybe 50K for each person. Since it is not subject to fractional reserve banking, it would not be inflationary, and we dont have to borrow it or raise taxes to pay for it. It has to be legal tender for everything except the Federal Income Tax, since we only pay Income tax to pay the interest on the money government borrows.

But you won't hear that from Ben, he does want to end up like Lincoln or JFK, he represents the shareholders of the Federal Reserve Banks, despite being approinted by the President, banks like Citibank, JPMorgan, etc.

Get the Web of Debt to learn more about your money ( http://www.webofdebt.com )

[herbert browne]

I'm fascinated with the "like father, like son" angle. Bush1 presided over the S&L real estate loan bailout- and persecuted a former dictator/asset (Noriega). His son is about to begin a real estate loan bailout, after persecuting Saddam Hussein- one of his father's dictator/assets. Funny thing... ^..^

[Left_Wing_Fox]

The solution is simple. Congress has the power to create money. Have them issue money directly to those who need it, call it Amerobacks (like Lincolns Greenbacks). This money can be created, and does not need to be borrowed. As Thomas Edison said, if a government can issue 30 billion in bonds, it can issue 30 billion in currency. Banks would need to accept the money in different deposit accounts that bear no interest, and can not be multiplied by 10 like the Feds fractional reserve system allows.

Anyone else have visions of the Weimar Papiermark after that sentence?

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[The Phantom]

It recalls the late Idi Amin Dada who ordered the Ugandan central bank to "just print more money" to pay off the foreign debt, etc.

[B-Money]

Ever since watching "The Last King of Scotland" I am a big Idi Amin fan! Let's print more money!

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Have them issue money directly to those who need it, call it Amerobacks

Good idea.

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[Elfmeter]

Good idea

The next step.

[The Phantom]

Is this spam the curse of Idi Amin?

Or is it related to the Chinese spam that used to appear? Used to like the Chinese spam. Sorta.