Austrian School

A Fed Rate Hike Won't Solve the Current Crisis

This is an article that says you can help a drunk by keeping him in booze. You know, if you try to make him stop drinking he's likely to get very sick, so do the right thing and keep him drunk.

I agree with the previous poster in that inflation doesn't have to be in the form of higher wages. It could be that its just making everybody poorer (the money you have buys less of the things you need to live).

Low interest rates below what the level of savings would have naturally dictated is like taking human growth hormone. You can only get certain amoutn fo healthy growth, beyond that the HGH just creates tumors and other cancers. We've gotten to the point where the tumors have been able to buy enough influence in congress that they can keep the flow of HGH coming. Also, many people can no longer tell the difference between what is tumor and the original organism. So when the tumor shrinks they exclaim "our growth is stagnating, protect the growth"

Author lacks any sense of economic justice, all about how to keep a messed up system teetering along. I've venture to guess he doesn't know what a healthy system is supposed to look like, and just knows what he's experienced in his lifetime.

On a Disastrous Jobs Number, Recession is Obvious

I keep hearing the media say that the unemployment rate is low by historical standards. They'd don't seem to understand that they're making an apples to oranges comparison.

Unintended Socialization of the Housing Market and Its Consequences

Great break down of Frank's misguided attempt at socialing the losses of the greatest housing bubble in history.

Misguided Calls for Activism

The reflexive thing is to "DO SOMETHING". Its much more subtle to realize that less is more. Obviously more and more regulation isn't working. Einstein said something to the effect that you aren't going to solve a problem with the kind of thinking that got you there in the first place.

Free the market. The oven is cleaning itself right now, only problem for some people had all their cookies in there and they're going up in smoke.

Keynes and all the other central planners are horses patoots.

The Fed is Terrified

FUBAR

The Case for Recession Strengthens

Since housing prices are now getting more affordable and rents continue to trend up mildly, maybe they can change the statistic that they call the CPI to switch from rents to house prices so they can continue to lie about the inflation rate. Now if I could only eat my big screen TV and fuel my car with cheap imported clothing, everything would be okay.

Time to Reform the Fed?

The answer isn't more regulation its less. Its like having a rotten railing atthe edge of a cliff. If there were none there, people would use common sense and keep their distance. Lets free ourselves of the Fed once and for all. Our biggest economic disasters have occured since they got their tenticles into our economy after they were given power in 1913. If the Fed chairman serves at the pleasure of the president, how can you say he is independant? Greenspan learned during the term of Gerorge 1, that if you don't do what your boss wants, bad things can happen.

The taxpayers will be tapped to pay for a bank bailout under the guize that we're protecting america. Well, the New York banks aren't America, and life would go on without them or the Fed.

Fed's Proposed Lending Rules Ignite Fierce Debate

I support the idea of taking pwer awa from he central bank, but not if it means placing it in the hands of blow hards like Dodd. When are we going to learn that the market can price better than beurocrats?

Bill Poole: A Fed 'Put' Exists

Ya you make my point "the goverment helped facilitate it.."

I've studied Americas first great depression plenty. You would do well to do the same. I'd recommend you start with Rothbard's "Americas Great Depression" and go from there.

Bill Poole: A Fed 'Put' Exists

Interventions in smaller conflagrations (LTCM) only enable further risk taking up to the point at which even the resources available to a govenment granted agency are inadequate to contain the collapse.

Regarding your comments on Americas first Great Depression. The credit expansion and malinvestment of the preceeding period were the cause of the neccessary liquidation. There was no other possible outcome from that point in time although it could have been postponed and amplified by earlier easing by the nascent Fed.

I wish it weren't so, but I fear we are going to try that again. Seems we've discovered interest only loans all over again 80 years later.

To make an analogy to another large system, the ecosystem of Americas west, it was the multitude of small fires that burned off dead fuel in small batches that keep things in balance. When man first started stopping these it was an easy task, and seemed to show obvious benefit. But as the dead and diseased fuel built up, the size of the fires increased until they have fires that are so large that they cannot be controlled anymore by man. The fires simultaniously burn vast areas as they liquidate the accumlation of malinvestment. So instead of little patches here and there every year, they get huges fires every 10 years or so.

When corrections happen in disparate areas, its easier for those effected to recover by moving to an uneffected areas. When it happens all at once more suffer for longer.

Bill Poole: A Fed 'Put' Exists

Think what that disingenuous hack was saying is that if your firm's risk taking is large enough to have a macroeconomic effect, we will bail you out. If you are an individual, or a small firm, you're can help pay for it by depreciation of your savings and future wages. I don't understand how he thinks this is no cause for moral hazard. And regarding the hostorical precidence for bailing the market, this just shows that the past we had good leadership at the fed, and now we have political hacks that advocate only for short term incentives.

Do Rate Cuts Really Make an Impact?

Since the more the fed reduces the overnight rate the worse the market is, how about we try raise them instead?

Reducing rates now is just prolonging the necessary correction. This will just cause a prolonged period of funk after the Fed has finnaly shot their wad. In other words "I think we're turning Japanese, I think we're turning Japanese I really think so..."

Good points abbottmd

What Does the Jump in Jobless Claims Mean for the Economy?

Consumption in recent years hasn't ben supported by incomes, its been supported by borrowing. You can only do this for so long before you have to start paying it back, at which point your consumption spending becomes less than your income. Policy has encouraged consumption, when it should have been ecouraging productivity. Its a mistaken understanding of the cause/effect of wealth. Its like saying "I've noticed that when people are rich, they eat more lobster, therefore we should encourage people to eat lobster because we've noticed this correlation of lobster eating and being wealthy."