The Quiet Coup

[lutherblsstt]

The crash has laid bare many unpleasant truths about the United States. One of the most alarming, says a former chief economist of the International Monetary Fund, is that the finance industry has effectively captured our government—a state of affairs that more typically describes emerging markets, and is at the center of many emerging-market crises. If the IMF’s staff could speak freely about the U.S., it would tell us what it tells all countries in this situation: recovery will fail unless we break the financial oligarchy that is blocking essential reform. And if we are to prevent a true depression, we’re running out of time.

The Quiet Coup - The Atlantic (May 2009)

[RobInKuwait]

The crash has laid bare many unpleasant truths about the United States. One of the most alarming, says a former chief economist of the International Monetary Fund, is that the finance industry has effectively captured our government—a state of affairs that more typically describes emerging markets, and is at the center of many emerging-market crises. If the IMF’s staff could speak freely about the U.S., it would tell us what it tells all countries in this situation: recovery will fail unless we break the financial oligarchy that is blocking essential reform. And if we are to prevent a true depression, we’re running out of time.

The Quiet Coup - The Atlantic (May 2009)

I've heard similar things before. The entire argument doesn't make any sense to me.

We have a Federal Reserve with a political appointee in charge determining the velocity of money in the United States. If you want to shore up reckless speculation, raise rates. The conditions that allowed this current crisis to happen start and end with the Federal Reserve. Look at the facts objectively:

There have been 5 major bubbles in the past 10 years:

1. Tech Stocks
2. Housing
3. Broad Market Stocks
4. Oil and Food
5. Consumer Credit

A bubble cannot form without an imbalance in money and credit. There was too much money and credit and it created artificially high prices across the board.

This is nothing to do with "Oligarchs". This is poor monetary policy.

[lutherblsstt]

I've heard similar things before. The entire argument doesn't make any sense to me.

We have a Federal Reserve with a political appointee in charge determining the velocity of money in the United States. If you want to shore up reckless speculation, raise rates. The conditions that allowed this current crisis to happen start and end with the Federal Reserve. Look at the facts objectively:

There have been 5 major bubbles in the past 10 years:

1. Tech Stocks
2. Housing
3. Broad Market Stocks
4. Oil and Food
5. Consumer Credit

A bubble cannot form without an imbalance in money and credit. There was too much money and credit and it created artificially high prices across the board.

This is nothing to do with "Oligarchs". This is poor monetary policy.

I know,but the IMF will be the last ones to point the finger at the Fed.

Check out this quote from Johnson,who was former chief economist at the IMF,by the way.

"We've seen the devastating effects of stagnant money and everyone can agree on the simple observation that a healthy economy requires the brisk flow of money."

This is a lie invented by the central bankers and perpetuated by its apologists like the author of the article,Simon Johnson. There was nothing stagnant about money leading up to the crisis. Quite the opposite.

A healthy economy requires genuine savings and genuine productivity, not loose credit via artificially low interest rates. For the last few years, the single largest industry in the United States was the financial industry. More people made more money merely moving money around than at any other business. But all that wealth was merely an illusion--a trick perpetuated by the Federal Reserve to effectively export the price inflation its policies inevitably lead to.

And now the very people who benefitted from this financial scam are going to benefit again as control of the entire banking industry, and a good deal of real estate is simply handed to them by the people of the United States suckered by calls for nationalization of the financial industry. Thus abuse of political power is turned into...more political power.

[RobInKuwait]

I know,but the IMF will be the last ones to point the finger at the Fed.

Check out this quote from Johnson,who was former chief economist at the IMF,by the way.

"We've seen the devastating effects of stagnant money and everyone can agree on the simple observation that a healthy economy requires the brisk flow of money."

This is a lie invented by the central bankers and perpetuated by its apologists like the author of the article,Simon Johnson. There was nothing stagnant about money leading up to the crisis. Quite the opposite.

A healthy economy requires genuine savings and genuine productivity, not loose credit via artificially low interest rates. For the last few years, the single largest industry in the United States was the financial industry. More people made more money merely moving money around than at any other business. But all that wealth was merely an illusion--a trick perpetuated by the Federal Reserve to effectively export the price inflation its policies inevitably lead to.

And now the very people who benefitted from this financial scam are going to benefit again as control of the entire banking industry, and a good deal of real estate is simply handed to them by the people of the United States suckered by calls for nationalization of the financial industry. Thus abuse of political power is turned into...more political power.

Wow. I could not agree more.

Never thought I'd say that to you!