on the reality side of the line, the Fed NEEDS to maintain a level of independence from the Central Government.
Then there is the problem of 'self fulfilling profacy' - where people pull out of a bank, so the bank has to sell more assets at fire sale pricing, and then folks say, oh look they are fire sale selling... and. then...
The ultimately comedy is that this is what happened in 'developming markets', so they learned the hard lesson - hold a whole lot of ferrign devil currency, so that their speculators will not make a run on the national currency...
So if folks start hording currency, then the supply of money drops, and then when the central banker pushes out more money, and it gets sucked up, and the rate finally hits ZERO - this is known as a liquidity trap....
To get us out of this, in classical keynesian model if for the Demand of Last Resort to step up to the plate and demand things - like a new Great White Fleet - cf Mahan, 'Sea Power' - the grand navalist, then look at how the creation of the american made steel, in american ship yards, would do more than merely give us a Big Stick for the Caribean... but would help america out of the 1890's Depression in ways that the mere Spanish American War had not fully done...
{ not like this is the first time the nation has seen a classical nineteenth century bank run... }
So what would be more interesting is getting a fuller sense of the 'not actually banks' that now want to be banks for the bail out...
ah yes... but this way of course takes us back to the reality based community, and that of course causes Capital Gains Taxes, which causes GAY MARRIAGES!!!!
think about it....
Then there is the problem of 'self fulfilling profacy' - where people pull out of a bank, so the bank has to sell more assets at fire sale pricing, and then folks say, oh look they are fire sale selling... and. then...
The ultimately comedy is that this is what happened in 'developming markets', so they learned the hard lesson - hold a whole lot of ferrign devil currency, so that their speculators will not make a run on the national currency...
So if folks start hording currency, then the supply of money drops, and then when the central banker pushes out more money, and it gets sucked up, and the rate finally hits ZERO - this is known as a liquidity trap....
To get us out of this, in classical keynesian model if for the Demand of Last Resort to step up to the plate and demand things - like a new Great White Fleet - cf Mahan, 'Sea Power' - the grand navalist, then look at how the creation of the american made steel, in american ship yards, would do more than merely give us a Big Stick for the Caribean... but would help america out of the 1890's Depression in ways that the mere Spanish American War had not fully done...
{ not like this is the first time the nation has seen a classical nineteenth century bank run... }
So what would be more interesting is getting a fuller sense of the 'not actually banks' that now want to be banks for the bail out...
ah yes... but this way of course takes us back to the reality based community, and that of course causes Capital Gains Taxes, which causes GAY MARRIAGES!!!!