Stiglitz - Fed system corrupt

[karim0028]

http://www.huffingtonpost.com/2010/0...itle_permalink

One of the world's leading economists said Wednesday that the very structure of the Federal Reserve system is so fraught with conflicts that it's "corrupt."

Nobel laureate Joseph Stiglitz, a former chief economist at the World Bank, said that if a country had applied for World Bank aid during his tenure, with a financial regulatory system similar to the Federal Reserve's -- in which regional Feds are partly governed by the very banks they're supposed to police -- it would have raised alarms.

"If we had seen a governance structure that corresponds to our Federal Reserve system, we would have been yelling and screaming and saying that country does not deserve any assistance, this is a corrupt governing structure," Stiglitz said during a conference on financial reform in New York. "It's time for us to reflect on our own structure today, and to say there are parts that can be improved."

"So, these are the guys who appointed the guy who bailed them out," Stiglitz said. "Is that a conflict of interest?" he asked rhetorically.

"They would say, 'no conflict of interest, we were just doing our job,'" he answered. "But you have to look at the conflicts of interest."

[Starving Steve]

Re: Stiglitz - Fed system corrupt

http://www.huffingtonpost.com/2010/0...itle_permalink

To understand the governance in the United States, just observe the money flows between Congress, Wall Street, the big banks, and the Federal Reserve. Stiglitz is right.

[D-Mack]

Re: Stiglitz - Fed system corrupt

Is the FED getting desperate with their PR ?

[medved]

Re: Stiglitz - Fed system corrupt

http://www.huffingtonpost.com/2010/0...itle_permalink

Another boneheaded Nobel laureate... The FED is corrupt! Oh no! Who woulda thunk!

Mr. Stiglitz, the whole idea of central banking is corrupt. Show me one central bank running its country’s financial system that is not in trouble. Japan? UK? Spain? All of them are gov’t agencies run by professional dogoodniks. How about dogoodnik-run US agencies? Fannie/Freddie? Aren’t they thoroughly regulated for the good of We The People? Of course, they are not corrupt! :rolleyes:

What a moron. And of course, the World Bank is now the supreme authority on doing everything right. The WB (and Mr. Stiglitz) will be the judge of who are the bad guys and who are the good guys. And, of course, Mr Soros is now a good guy, because he supports Mr. Stiglitz. Gimme a break.:rolleyes:

Luckily, the whole financial crisis we are in will weaken World Bank and other supra-national financial structures. The US will lose its dominant power and national CBs will fight each other like spiders in a jar. They will have no choice but to use The Fourth Currency to some degree. That will partially bring them back from extreme socialism back to reality.

[ThePythonicCow]

Re: Stiglitz - Fed system corrupt

Luckily, the whole financial crisis we are in will weaken World Bank and other supra-national financial structures. The US will lose its dominant power and national CBs will fight each other like spiders in a jar. They will have no choice but to use The Fourth Currency to some degree. That will partially bring them back from extreme socialism back to reality.

Using much the same words, allow me to present a quite different forecast.

Unfortunately, the financial crisis we are in is weakening most nations politically and financially. The US and other national CB's will all lose power to the World Bank and other supra-national financial structures. The nations will have no choice but to use Carbon Credits, controlled by a central bureaucracy to some degree. That will move our dominant political structure from various national social governments to a non-democratic world bureaucracy.

If global warming doesn't get us Carbon Credits, Peak Oil will.

Russia and China are not pleased with this direction. This may lead to serious war if they don't "submit".

If civilization survives this transition, we will go from the Dollar to Carbon Credits as the basis for the world's monetary system.

Prepare to consume less energy and food :eek:.

[cjppjc]

Re: Stiglitz - Fed system corrupt

PC, the world is not going to use carbon credits as a monetary system. Gold or the much discussed IMF SDR. Maybe the Yuan moves to reserve status over time.

[ThePythonicCow]

Re: Stiglitz - Fed system corrupt

PC, the world is not going to use carbon credits as a monetary system. Gold or the much discussed IMF SDR. Maybe the Yuan moves to reserve status over time.

Well, yes, my carbon credit prediction is rather 'far out" .

We'll see in perhaps two or three years.

By 'carbon credits as a monetary system' I not mean that we will have carbon credit backed money, but rather that the primary means of determining who has how much of what will no longer be who has (or can borrow) the money but rather who has the carbon credits.

[Starving Steve]

Re: Stiglitz - Fed system corrupt

Just looking at my invoice from the hardware store here in British Columbia, we now pay: Goods and Services Tax 5%, BC sales tax 7%, and carbon tax depending upon some bureaucrat's assessment of a product's so-called "carbon damage" to the environment, not to mention re-cycling fees if products must be re-cycled.

The carbon tax is the most ridiculous tax that I have ever seen in my life. And there is no evidence that small amounts of carbon-dioxide do any damage what-so-ever to the environment; in fact, small amounts of carbon emitted into the atmosphere are good for plants and good for the environment.

The lesson in the carbon-tax folly is to NOT give governments anywhere any reason to dream-up new taxes, because governments are specialists in taxation, tax planning, tax justification, tax forms, tax rules, tax treaties, tax audits, tax penalties, not to mention the wholesale squandering of tax revenues.

Imagine someday soon, government may tell an entrepreneur that they can't start or relocate an activity to a new jurisdiction because, "the applicant doesn't have sufficient 'carbon credits' to support the activity"? This is the direction in which we are headed.

Water connection restrictions are now used by regional planning departments to restrict urban development. Imagine someday that such regional planning departments (like the Capitol Regional District of Victoria, BC) might use carbon credit levies to restrict development.... Better now to stop the carbon taxation schemes by government before the schemes go next into carbon credits, carbon trading, carbon banking, carbon levies, and carbon planning authorities.

[Raz]

Re: Stiglitz - Fed system corrupt

... The lesson in the carbon-tax folly is to NOT give governments anywhere any reason to dream-up new taxes, because governments are specialists in taxation, tax planning, tax justification, tax forms, tax rules, tax treaties, tax audits, tax penalties, not to mention the wholesale squandering of tax revenues. ...

Steve, you just painted a portrait of the Conservative view of Big Government.
I'm not looking to start a sqabble since I believe that government is absolutely necessary as a "referree" in the financial sector, and others as well (Pharmaceuticals comes to mind).

But, how do you square your aforementioned thoughts with a penchant for Socialism?:confused:

[Rajiv]

Re: Stiglitz - Fed system corrupt

I do not see why you consider "wholesale squandering of tax revenues" as socialism.

Socialism

Socialism refers to the various theories of economic organization which advocate either public or direct worker ownership and administration of the means of production and allocation of resources.^[1][2][3] A more comprehensive definition of socialism is an economic system that has transcended commodity production and wage labor, where economic activity is carried out to maximize use-value as opposed to exchange-value and thus a corresponding change in social and economic relations, including the organization of economic institutions and resource allocation;^[4] often implying advocacy for a method of compensation based on the amount of labor expended.^[5]

Most socialists share the view that capitalism unfairly concentrates power and wealth among a small segment of society that controls capital and derives its wealth through exploitation, creates an unequal society, does not provide equal opportunities for everyone to maximise their potential,^[6] and does not utilise technology and resources to their maximum potential nor in the interests of the public.^[7]

Many socialists, from Henri de Saint-Simon, one of the founders of early socialism (Utopian Socialism), to Friedrich Engels and Karl Marx, advocated for the creation of a society that allows for the widespread application of modern technology to rationalise economic activity by eliminating the anarchy of capitalist production.^[8][9] They reasoned that this would allow for wealth and power to be distributed based on the amount of work expended in production, although there is disagreement among socialists over how and to what extent this can be achieved.

Socialism is not a concrete philosophy of fixed doctrine and programme; its branches advocate a degree of social interventionism and economic rationalisation (usually in the form of economic planning), but sometimes oppose each other. A dividing feature of the socialist movement is the split between reformists and revolutionaries on how a socialist economy should be established. Some socialists advocate complete nationalisation of the means of production, distribution, and exchange; others advocate state control of capital within the framework of a market economy.

Socialists inspired by the Soviet model of economic development have advocated the creation of centrally planned economies directed by a state that owns all the means of production. Others, including Yugoslavian, Hungarian, German and Chinese communist governments in the 1970s and 1980s, have instituted various forms of market socialism, combining co-operative and state ownership models with the free market exchange and free price system (but not free prices for the means of production).^[10] Modern social democrats propose selective nationalisation of key national industries in mixed economies, while maintaining private ownership of capital and private business enterprise. (In the 19th and early 20th century the term was used to refer to those who wanted to completely replace capitalism with socialism through reform.) Modern social democrats also promote tax-funded welfare programs and regulation of markets; many, particularly in European welfare states, refer to themselves as socialists, despite holding pro-capitalist viewpoints, thus adding ambiguity to the meaning of the term "socialist". Libertarian socialism (including social anarchism and libertarian Marxism) rejects state control and ownership of the economy altogether and advocates direct collective ownership of the means of production via co-operative workers' councils and workplace democracy.

Modern socialism originated in the late 18th-century intellectual and working class political movement that criticised the effects of industrialisation and private ownership on society. The utopian socialists, including Robert Owen (1771–1858), tried to found self-sustaining communes by secession from a capitalist society. Henri de Saint Simon (1760–1825), the first individual to coin the term socialisme, was the original thinker who advocated technocracy and industrial planning.^[11] The first socialists predicted a world improved by harnessing technology and combining it with better social organisation, and many contemporary socialists share this same belief. Early socialist thinkers tended to favour an authentic meritocracy combined with rational social planning, while many modern socialists have a more egalitarian approach.

[Raz]

Re: Stiglitz - Fed system corrupt

I do not see why you consider "wholesale squandering of tax revenues" as socialism.

I wasn't defining Socialism. I both know and understand quite well exactly what Socialism is.

But it should be obvious that to hold Steve's view as to what governments are "good at" would mean that the larger and more intrusive the government, the more taxes it would levy, and the more tax revenues it would be likely to squander.

[Rajiv]

Re: Stiglitz - Fed system corrupt

The same logic would hold for any large entity -- for example a large corporation -- the larger the entity, the more likely it is to squander a larger sum of money. However, it is not at all clear to me that the sum of resources squandered would be a larger proportion of the entire pie.

But it is very clear, that once power and wealth starts getting concentrated in the hands of a few, the process continues -- until either a voluntary (e.g. a potlatch) or an involuntary (e.g. a revolution) redistribution of wealth occurs.

[Starving Steve]

Re: Stiglitz - Fed system corrupt

I wasn't defining Socialism. I both know and understand quite well exactly what Socialism is.

But it should be obvious that to hold Steve's view as to what governments are "good at" would mean that the larger and more intrusive the government, the more taxes it would levy, and the more tax revenues it would be likely to squander.

Hi Raz,

Governments are good at doing certain things. Over all, govn't has not done a bad job with public schools, especially with public universities. Over all, public utilities work well. Public works such as TVA and the Hoover Dam work well. Social security works. Federal Deposit Insurance works. Medicare works.

Medicare here in Canada is wonderful too, and I have experienced no problems with my care here in Canada. My care is excellent and comparable to my care with Kaiser Permanente private health insurance in California, but my direct (out-of-pocket) cost for healthcare through Canada's Medicare Programme is zero. And Medicare in Canada covers everyone, regardless of age or pre-existing condition. No-one is excluded.

But what scares me about government is taxation and authority; government has an endless appetite for taxes and power. There has to be limits upon everything, including government and its appetite for new taxes and new authority. That is all that I am saying.... So on this point, I think we would agree.

S.S.

[sunskyfan]

Re: Stiglitz - Fed system corrupt

Just a shout from the peanut gallery but isn't the debate about "government" almost obsolete. This issue is who gets to create money not who gets to spend it. It has been the wild wild West now for some time and while we dither about government Corporate Banking and Finance (The Money Creators) are stealing our lives from underneath us.

[Raz]

Re: Stiglitz - Fed system corrupt

The same logic would hold for any large entity -- for example a large corporation -- the larger the entity, the more likely it is to squander a larger sum of money. However, it is not at all clear to me that the sum of resources squandered would be a larger proportion of the entire pie.

I don't disagree. But it makes a case for Subsidiarity, and for a smaller Federal government, not a larger one.

But it is very clear, that once power and wealth starts getting concentrated in the hands of a few, the process continues -- until either a voluntary (e.g. a potlatch) or an involuntary (e.g. a revolution) redistribution of wealth occurs.

I don't see how it could eventuate otherwise with a Central Bank of any kind.

It also helps to keep in mind that human beings are corrupt, without exception, and that we are seeing the result of what Tocqueville wrote of when he said that even American Democracy would fail as soon as the masses realized that they could vote themselves goodies from the public treasury.

"Entitlement" spending is going to consume everything - that is, what the banksters and oligarchs don't steal through their owned "Representatives" in our Congress.