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If we lower them we have no homes, if we raise them we have no jobs. The fact of the matter is conventional central banking is a failure, as is widespread priv

If we lower them we have no homes, if we raise them we have no jobs. The fact of the matter is conventional central banking is a failure, as is widespread private homeownership in metropolitan areas.

ethbr0 5y ago
Well, conventional central banking usually has the goals of "prevent another Great Depression" and "keep inflation under control." In that respect, they've been fairly successful. The side effects are... less good. But worse than a national depression? Eh.
- Ericson2314 5y ago
  https://jwmason.org/slackwire/at-jacobin-the-fed-doesnt-work-for-you/ https://jwmason.org/slackwire/at-jacobin-the-fed-doesnt-work... well start with those side effects: inflation is kept in check by beating back workers whenever they get to powerful. Then take into account how lousy growth has been since the 1970s when they started doing that. If we could have had depressions but more amortized growth, and not "jobless recoveries" and anemic amortized growth, would that have been worse or better?
  - imtringued 5y ago
    That's why they changed the inflation target. If your goal is 2% then you have to raise rates before you even hit 2% nipping full employment in the bud. If you target an average rate of 2% then having a year with 5% and four with less than 2% lets you balance things out. Edit: I read the article and it basically boils down to rich people benefiting from low inflation because it doesn't erode their deposits and makes stocks/housing go up without increasing wages. It's pretty much true but it is also so obvious to be boring. Money from the past is power from the past. Maintaining the value of money earned 60 years ago is the same as maintaining power obtained 60 years ago. Holding onto money doesn't help workers be more productive so if they spent their 60 year old money it would get eroded by inflation. You therefore need to add some slack in the labor supply that is not used up by anyone, meaning nobody is going to miss that labor if it is paid by 60 year old dollars that would otherwise result in inflation if there were full employment.
    - Ericson2314 5y ago
      http://jwmason.org/slackwire/alternative-visions-of-inflation/ http://jwmason.org/slackwire/alternative-visions-of-inflatio... this one is fresh off the presses and gets deeper into the issues.
imtringued 5y ago
I don't see how it is a failure. Our money is a failure because of the asymmetry between deposits and loans. You must pay your loan on time but you don't have to spend your deposits on time. The obvious answer is always extend the deadline or take away the deposit.

If we lower them we have no homes, if we raise them we have no jobs. The fact of the matter is conventional central banking is a failure, as is widespread private homeownership in metropolitan areas.

ethbr0 5y ago

Well, conventional central banking usually has the goals of "prevent another Great Depression" and "keep inflation under control." In that respect, they've been fairly successful. The side effects are... less good. But worse than a national depression? Eh.

Ericson2314 5y ago
https://jwmason.org/slackwire/at-jacobin-the-fed-doesnt-work-for-you/ https://jwmason.org/slackwire/at-jacobin-the-fed-doesnt-work... well start with those side effects: inflation is kept in check by beating back workers whenever they get to powerful. Then take into account how lousy growth has been since the 1970s when they started doing that. If we could have had depressions but more amortized growth, and not "jobless recoveries" and anemic amortized growth, would that have been worse or better?
- imtringued 5y ago
  That's why they changed the inflation target. If your goal is 2% then you have to raise rates before you even hit 2% nipping full employment in the bud. If you target an average rate of 2% then having a year with 5% and four with less than 2% lets you balance things out. Edit: I read the article and it basically boils down to rich people benefiting from low inflation because it doesn't erode their deposits and makes stocks/housing go up without increasing wages. It's pretty much true but it is also so obvious to be boring. Money from the past is power from the past. Maintaining the value of money earned 60 years ago is the same as maintaining power obtained 60 years ago. Holding onto money doesn't help workers be more productive so if they spent their 60 year old money it would get eroded by inflation. You therefore need to add some slack in the labor supply that is not used up by anyone, meaning nobody is going to miss that labor if it is paid by 60 year old dollars that would otherwise result in inflation if there were full employment.
  - Ericson2314 5y ago
    http://jwmason.org/slackwire/alternative-visions-of-inflation/ http://jwmason.org/slackwire/alternative-visions-of-inflatio... this one is fresh off the presses and gets deeper into the issues.

imtringued 5y ago

I don't see how it is a failure. Our money is a failure because of the asymmetry between deposits and loans. You must pay your loan on time but you don't have to spend your deposits on time. The obvious answer is always extend the deadline or take away the deposit.