tag:blogger.com,1999:blog-6557458849091969678.post4436899559683201574..comments2023-06-15T09:13:45.467-04:00Comments on Liberty's Torch: Banking as a Rent-Seeking EnterpriseFrancis W. Porrettohttp://www.blogger.com/profile/05862584203772592282noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-6557458849091969678.post-81613048860677237452012-11-30T23:44:02.214-05:002012-11-30T23:44:02.214-05:00I am no expert in early American history, but it w...I am no expert in early American history, but it was my understanding that (Alexander) Hamilton was very much pro-central banking -- and much other pomp and trappings that go with a strong, centralized state. He thought America should model itself more after Britain of the time. Most of the other FF's were very much against him.<br /><br />But yes, that's about right. I don't think the mandate of the central bank was ever to 'stop' inflation, though. It has basically been to 'manage' the money supply to 'achieve' 1) maximum employment, and 2) 'stable prices.' Stable prices has generally been interpreted to mean 'consumer prices,' which means that they can pump stock markets and housing prices up to kingdom-come (very popular) and everybody waves it off -- even as it ruins the economy.<br /><br />As to the 2% policy question -- actually, it is my understanding that it began with Bernanke. Bernanke believes more in 'inflation targeting,' which is in general the accepted European policy. Previous FED chairmen had no stated target. Greenspan liked to confound observers because he thought it critical that FED activities be unpredictable, so that markets would work things out in an unbiased manner, supposedly independent of the FED's activities. Others (like Bernanke) think that policy should be predictable, so that people know what to expect, and won't bias their activities in anticipation of changes in FED policy.<br /><br />Or something like that. Which should tell you that it's all witchcraft and voodoo.Scotthttps://www.blogger.com/profile/12915297057336831151noreply@blogger.comtag:blogger.com,1999:blog-6557458849091969678.post-45078130788360592052012-11-30T10:08:27.765-05:002012-11-30T10:08:27.765-05:00Scott, you understand this stuff much better than ...Scott, you understand this stuff much better than I do. But aren't the points you make about arbitrage and Goldman Sachs and the gaming of derivative, etc., very similar to why Hamilton and others argued AGAINST a Central Bank?<br /><br />People argue that a "central bank" can modulate inflation and ease the ups and downs of the business cycle. But when Bernanke says that 2% inflation is "stability," and a goal, isn't he just a statist son of bitch, hiding profits and leverage of bankers behind government-protected ponzi schemes?<br /><br />Wasn't the initial mandate of the central bank to STOP INFLATION? That is, despite business cycles, wasn't the bank supposed to guarantee the value of money? When/how did 2% devaluation of our dollar become the norm? (That's a rhetorical question. It became the norm as soon as we created a government entity to "protect" it.)furballnoreply@blogger.com