I suppose just being in an atmosphere that constantly made me question my assumptions about economics. Going to a university opens your eyes to a lot of different things and made me appreciate the other side.
I’m still very thankful to the “Austrians” for their insights, I think they’re underrated in the economics profession, but I also think the economics profession has moved on from the 1960s and the people here should too - really, we don’t need another hundred or so articles attempting to refute orthodox Keynesianism. We already know what you’re going to say anyways.
“TO THE survivors, the spoils. That is the cry going up at Goldman Sachs after it chalked up recession-defying—nay, record-breaking—quarterly profits on July 14th. Minting more than $3 billion in three months, so soon after its own near-death experience in the wake of Lehman Brothers’ demise, will enhance Goldman’s reputation as Wall Street’s overachiever. But it will also strike some as obscene given the scale of public support needed to keep the firm and its peers from buckling last year.”
And again with this. Equating all mainstream economics with Keynesianism as if all mainstream economics was homogenous - or if all Keynesianism was homogenous.
Thanks for denying that you meant what you clearly said until I cornered you with it.
Now lets tackle the obvious untruths.
You keep making unbacked assertions. Do you have any specific knowledge or are you just hoping the facts fit with your preconceptions?
Saying not all central banks promote the interests of member banks is like saying not all tax collectors collect taxes. Its a necessary condition.
Except that American Central banks existed for decades without deposit insurance. Deposit insurances is a minor attribute. The main function of a central banks, the reason they came into existing, was to hold the reserves of members.
If each bank holds their own reserves, banks must pass gold(or cash) between them every time a check is written. This prevents holding low reserves, because as soon as a loan is made the borrower will deposit the check in his own bank and the lender bank will have to transfer the full value of the loan to that other bank.
If all reserves are held by a central bank this “problem” is eliminated. All reserves are held in one place, so all member banks have access to a common pool of reserves. A single large upside down pyramid is built underneath the many individual upside down pyramids of the individual banks. Now when one bank makes a loan and the check is deposited at another bank, the original issuer still has access to the cash, as its still sitting in the Central Bank’s account and ready to be transferred to any member bank.
No longer are individual banks in competition with each other, trying to increase their own reserves at each others’ expense. Have you never heard that central banks are created to prevent bank failures? Of course are! That is the purpose of all cartels. To take the industry members out of competition with each other so as to benefit them all, at the consumer’s expense.
Yes, but there are differences between them and it’s important to realize that.
If you were to read nothing else but Mises articles you would think that every economics professor required his students to recite Keynes’ works by heart before earning their PhDs.
Except I did give a specific case. I am ready to discontinue this if it becomes more evident that all I’m doing is speaking to a microphone attached to a can of Mises.org articles.
In Switzerland cantonal banks are the only banks with specific state ties. Though the government does what it can to support the private banking interests, it’s not at all to the extent that other nations do. There’s an entire institution of differentiations in financial law that you’re just not recognizing here - or maybe you’re ignorant to it.
The central bank existed, but did not serve the primary purpose of keeping private banks afloat. The purpose of a central bank is to act as the financial tool for the central government - issuer of currency and sometimes financial regulator. Though I don’t know why this is being argued. The main function of keeping deposits insured is… well… deposit insurance.
That’s a nice red herring you have there. How many silver pieces are you selling it for?
The Bank of England was established as the central bank in mere return for loaning money to the crown to engage in war. You’re simply not looking at any facts. It’s easy to theorize instances of what you think makes sense, but looking at the evidence is much different.
I’ll give you that banks have acted to support the banking institution in reckless lending and general expansion, but that does not mean it has been that way always or is in every situation; it certainly doesn’t mean that banks must join a central bank in order to practice fractional reserve banking.
I read them based on the author. For some authors, it’s just a question of why should I even bother reading this new article when I could go back in the archives to read the same substance three years ago?
I’d pretty much agree with your assesment, the amount of lies spread by LvMI authors when it comes to mainstream economics is outstanding. It took me a while to realize that there exist precious few tradition Keynesians these days. Caplan’s piece did a lot too, I think it was pretty good. But like you I think that Austrians have done good work in monetary theory (White, Horwitz, Selgin) and public choice theory/ political economy (Boettke, Yeager, Leeson, Coyne, Stringham).
Of course, I won’t point out the inconvenient fact that these authors are all associated with GMU over the LvMI.