10 Responses to “My Question To Terry Jones Was Featured On ‘Front Page With Allen Barton’”

1. Joe
   June 30th, 2010 @ 9:47 am

   No comment really necessary Smitty. I think you summed it up well. Thanks.

2. Romeo13
   June 30th, 2010 @ 10:57 am

   And a third point, they have created complex economic theories, which, don’t work, to MAKE it seem hard.

   Its actualy fairly simple.

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   June 30th, 2010 @ 11:01 am

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4. dad29
   June 30th, 2010 @ 11:03 am

   You’ll LOVE this response to Mr. P.H.D.:

   http://www.ritholtz.com/blog/2010/06/economics-is-easy-comedy-is-hard/

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   June 30th, 2010 @ 1:43 pm

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6. Estragon
   June 30th, 2010 @ 3:28 pm

   I don’t think economics is so hard, but ignorance of it is really, really easy.

   Two questions:

   1. Before the FRB was given the power to regulate the currency, who did?

   2. If the FRB is to lose this power, who will replace them?

   .

   Until you can offer cogent answers to those two very simple questions, you’re just like some drunken peasant with a torch screaming, “Storm the Bastille!!”

7. smitty
   June 30th, 2010 @ 4:07 pm

   @Estragon,
   Your point was the gist of my question to Terry Brooks of IBD.

8. Adobe Walls
   June 30th, 2010 @ 5:08 pm

   Sometimes fire cleans better than sunshine.

9. Estragon
   July 1st, 2010 @ 6:33 am

   @smitty ~ Your phrasing leaves little doubt you’ve settled on a first step – “If we gather the shotguns and ammo to blow away the Federal Reserve zombie . . .”.

   At least you are gathering input as to post-destruction possibilities. First, the answer to #1 was that US currency was effectively regulated by a private citizen, J.P. Morgan, who had already rescued the federal government from a crisis before accepting the unofficial duties. In that earlier and more innocent time, it seemed only reasonable that the nation’s top banker perform the role, since no one knew the economy better.

   The rat bastard up and died, though. So this authority was added to the FRB, who really didn’t have all that much on their plate at the time – banks weren’t heavily regulated, there was no FDIC, the Reserve system basically ran itself – so it seemed logical.

   Although quasi-independent, the FRB was frequently susceptible to political pressure to match monetary policy to the needs of the party in power. This did harm the economy, of course, and hampered long-term growth until impending fiscal catastrophe forced Jimmy Carter to name Volcker as Chairman. Volcker quickly reasserted the Fed’s independence, and induced our worst recession since WWII in wringing the excesses out of our economy, but in the end he did what he set out to do.

   Volcker, Greenspan, and Bernanke can all be justifiably criticized for particular decisions. But overall it is hard to claim some other format would have made more consistently wise decisions without the benefit of hindsight.

   I’ll address #2 in a separate comment to break up the length.

10. Estragon
    July 1st, 2010 @ 6:42 am

    So, if we blow away the FRB, how do we perform the necessary functions it now handles?

    Darned good question, but one which is the obligation of those proposing to dump the Fed to answer.

    Will Congress take over these responsibilities? The political manipulation which would inevitably result is exactly the reason the FRB was set up as quasi-independent in the first place. It’s a 100% guaranteed corrupt screw-up, no margin of error needed.

    Should Treasury assume the roles, under the Executive authority? Ditto the above.

    Or shall we design anew, create from the void a new agency, somehow quasi-independent like the FRB, handling all the necessary functions of the FRB with the authority of the FRB, reformed to improve efficiency but otherwise indistinguishable from the FRB, but with a different name?

    Why not just debate and enact any needed reforms, and keep the FRB instead of going through that whole Kabuki theatre?

    Those who insist the “FRB must go!” have the obligation to explain how they propose to perform its functions.

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