Monetarism enters bankruptcy

[don]

The Fed under Greenspan and Bernanke violated the basic rules of both monetarism (money supply management) and Keynesianism (demand management). Fed monetary policy created false prosperity with excess money supply to fund debt manipulation and simultaneously to support income disparity as a source for capital formation to exacerbate overcapacity amid demand weakness.

Henry C K Liu (today's article)

http://www.atimes.com/atimes/Global_.../KA06Dj04.html

[due_indigence]

Re: Monetarism enters bankruptcy

Right on brother. I'm completely in agreement here. In fact I quoted Liu in an article of my own recently. It was Marxist overproduction masked by credit-induced artificial prosperity.

http://www.unlikelystories.org/ball0509.shtml

[Starving Steve]

Re: Monetarism enters bankruptcy

Why isn't the putz from Princeton asked to resign since he obviously doesn't know what he is doing and Fed policy is seat-of-the-pants, as Liu points-out clearly here in his expose. Same question with Geithner at the Treasury. Same question with Carney running the Bank of Canada now with his 9.5% annual food inflation. And the genius at 10 Downing Street in London, the moron who sold the Bank of England's gold at $252 per oz, why is he kept on by voters in the UK? Just how bad do things have to get before the public rebels against these tragically mis-guided policies? And these erroneous policies are a direct result of the faulty economics theories being taught in the world's universities to-day, i.e, that bad debt can be retired with more debt, credit standards can be loosened to zero everywhere, and that inflation is can go on forever because no-one pays the cost.

A copy of this expose of the mis-guided policies of Greenspan and Bernanke should be sent to every member of the U.S. Congress and to the White House. And students should start handing this expose over to their professors in colleges and questioning the tenants of modern economic theory.

[mcgurme]

Re: Monetarism enters bankruptcy

I think you linked to his older article, here is the link to the new one, "The burden of elitism," http://atimes.com/atimes/Global_Economy/KE06Dj03.html.

My favorite quote:

That has been the basic problem of the global economy for the past three decades. Low wages have landed the world in its current sorry state of overcapacity masked by unsustainable demand created by a debt bubble that finally imploded in July 2007. The whole world is now producing goods and services made by low-wage workers who cannot afford to buy what they make except by taking on debt on which they eventually will default.

[due_indigence]

My thought is that, first of all, worldviews are not overthrown overnight, especially one of near-400 years duration. There will be fits and starts. But yes, the intellectual desert that passes for modern economic policy is astonishing.

Believe me, I surprise myself with my own recent flirtation with Marxist notions. But I'm in Liu's camp --not that he's a confirmed Marxist-- nor am I. Nonetheless we are in the grips of an epic capitalist crisis. Here we are, healing the banking class, when it is only meaningful wage growth that will supply the demand necessary to address the overproduction dilemma. I prefer not to call this wealth distribution. Rather this is repatriating wealth expropriated by the elite to its rightful owner, the producer class. The producer class is the only class big enough to materially alter aggregate demand. However they need above-subsistence wages to accomplish this. Hank Paulson and his buddies can only wear one pair of pants per day. The rest is greed. Who's gonna buy the pants to keep the factories open??

Wage increase is not theft. Besides the bankers steal money for a living.

It's not a CREDIT crisis. It's a DEMAND crisis.