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Imagine that you have the power of gov. spending. Would you want that limited or rationalized? The 2% figure is defined by government statisticians. When those

Imagine that you have the power of gov. spending. Would you want that limited or rationalized? The 2% figure is defined by government statisticians. When those figures don't suit their spending desires, they will trot out concepts like "symmetric inflation". If government statisticians measure inflation to be less than 2% for a period of time, they will claim that inflation above this rate is required to achieve a symmetric rate of 2%. Even if we accept these premises, why then is a lower rate not "symmetrically" targeted when government statisticians measure inflation to be 8%? The system is better understood as a method of rationalization for gov. spending, political favors and "stimulus". The question is a good one, but I think you would be better served by questioning some of the underlying premises before proceeding. Why not allow the market to set interest rates? Why must capital be allocated by government technocrats? How can fallible men with imperfect information determine prices better than decentralized market mechanisms? When in history has price fixing been beneficial? What were the results of emperor Diocletian's edicts on maximum prices? Also note the shifting definition of inflation itself. Price inflation vs. the original definition, inflation of the money supply.

TheOtherHobbes 4y ago
You're assuming "markets" aren't at least as technocratic, open to manipulation, or just straightforwardly political. When the UK sold most of its critical infrastructure - using exactly the same arguments you're using - the reality wasn't a rational and perfectly organised free market utopia, it was an explosion of higher prices and lower service quality for customers, and huge profits for the buyers. Most of which were shipped offshore, because the new owners weren't even British. Even as we spesk privatised energy price gouging - there is no other word for it - is quite literally making electricity and gas unaffordable for anyone who isn't in the top decile of earnings. Not incidentally, it's also causing a burst of inflation which is being used as a transparently flimsy pretext to raise taxes, cut public services, and clamp down on wages.
- aww_dang 4y ago
  It is a bit tangential, but I appreciate your response. >You're assuming "markets" aren't at least as technocratic, open to manipulation, or just straightforwardly political. Where "experts" fail in the market, they are subject to competition. The conditions where they fail upwards are generally related to non-market political largess. >When the UK sold most of its critical infrastructure - using exactly the same arguments you're using... >privatized energy price gouging There's a large gulf between neoliberalism and laissez-faire. I do appreciate that the two are often conflated and that the distinction isn't always clear as they are often maligned together in popular discourse. >the reality wasn't a rational and perfectly organised free market utopia Utopia is a high bar to achieve. I'm just suggesting that having centrally planned interest rates is akin to price fixing. Overall a market rate of interest would be less bad IMHO. Rail infrastructure is a difficult issue, but the Japanese seem to have a successful private system. Maybe another commentor who is more familiar with Japan can elaborate on that.
jacknews 4y ago
omg, there should at least be an adult in the room, even if the rates they set have to reflect the markets to some extent. If the markets set the rate directly we'd have more wild swings than an olde time musical.

TheOtherHobbes 4y ago

You're assuming "markets" aren't at least as technocratic, open to manipulation, or just straightforwardly political. When the UK sold most of its critical infrastructure - using exactly the same arguments you're using - the reality wasn't a rational and perfectly organised free market utopia, it was an explosion of higher prices and lower service quality for customers, and huge profits for the buyers. Most of which were shipped offshore, because the new owners weren't even British. Even as we spesk privatised energy price gouging - there is no other word for it - is quite literally making electricity and gas unaffordable for anyone who isn't in the top decile of earnings. Not incidentally, it's also causing a burst of inflation which is being used as a transparently flimsy pretext to raise taxes, cut public services, and clamp down on wages.

aww_dang 4y ago
It is a bit tangential, but I appreciate your response. >You're assuming "markets" aren't at least as technocratic, open to manipulation, or just straightforwardly political. Where "experts" fail in the market, they are subject to competition. The conditions where they fail upwards are generally related to non-market political largess. >When the UK sold most of its critical infrastructure - using exactly the same arguments you're using... >privatized energy price gouging There's a large gulf between neoliberalism and laissez-faire. I do appreciate that the two are often conflated and that the distinction isn't always clear as they are often maligned together in popular discourse. >the reality wasn't a rational and perfectly organised free market utopia Utopia is a high bar to achieve. I'm just suggesting that having centrally planned interest rates is akin to price fixing. Overall a market rate of interest would be less bad IMHO. Rail infrastructure is a difficult issue, but the Japanese seem to have a successful private system. Maybe another commentor who is more familiar with Japan can elaborate on that.

jacknews 4y ago

omg, there should at least be an adult in the room, even if the rates they set have to reflect the markets to some extent. If the markets set the rate directly we'd have more wild swings than an olde time musical.