It always seems to hurt when I agree with Robert Reich. We are in a World which does not respect American labor, and will not support Us in the style to which We have become accustomed. The Government has tried to borrow the Money for Us, but that source of these funds are now in jeopardy; the World may not respect the Government either, especially after the run-up in American debt. The later tends to be a real Downer when searching for respect. A great part of the lack of respect is the fact that American industry does not produce for the Consumer, whether he is American or foreign. I live in an agricultural area, and see the machinery produced for the American farmer; relatively useless to farmers, but really great for agribusiness. Machines cannot be bought which do not burn gallons per hour, or handle a potential hundreds of acres per year. American farmers think this is great often, but their entire field can be handled in hours; wonderfully labor efficiency, though the complex machinery requires bi-annual visits to the Shop at about $6000-$12000 per trip–saying nothing about the unrecorded Downtime. Foreigners, if they purchase, train an entire Maintenance team to keep the machines in the field continuously. We must get a little more User-Friendly, with less Operating Costs; Labor Hours are not really demon ogres.
I like this column because it asks a bunch of Questions which will never find a real Answer. Therefore, I will try to answer them for gentle Ben, and present a group of my own. Congress has been looking for a Scapegoat, rather than a Solution, and a failure to blame enforcement of complex, confusing regulations is easier for a member of Congress than passing sensible regulation of the financial industry. This basically answers the first question, as neither God or Devil would have satisfied Congress as leadership of the Fed. The greatest cause of the crisis was paying extreme bonuses for writing and selling Credit Default Swaps; study of Risk was lost with Sight dedicated to the bonanza of wealth potential. TARP was ridiculous in the first place, and its removal could hardly affect anything but Speech-writers. Breaking up large firms would be beneficial, and no one has yet convinced me that Bankruptcy was not the proper vehicle for this Break-Up. The reason that the Fed will not adopt a policy of 3% Inflation is the fact that We already have such a rate, and the Fed does not want an Inflation rate in the high digits.
Questions I could ask Bernanke are wide-ranging and numerous, but I will keep it simple and sweet. Why does the Fed keep a ‘No-Interest rate’ policy when it produces as great a curtailment of Consumption, as counter-reaction produces Consumption? Why make Business loans easy and cheap, when Business is actually pushing less Product; and will not Hire or Borrow under those conditions? Why is the Fed creating the ability for Banks to repay their debt obligations, while forestalling a like process elsewhere in the economy; there is no attempt to actually bring relief to Those in the economy who actually hold unviable financial positions? There has been no effort to suppress either Credit Card interest rates, or Business loan interest rates–Why? Can the economy restart without serious Capital investment is previously un-pursued economic channels, which the Fed is making no effort to fund; should it not be the policy of the Fed to give advantage to new industry, not wealth monsters which should be taken apart? Could you imagine the Fed absorbing and financing something like the Small Business Administration–actually working like a Banker for Those who cannot aspire to a Private Sector banker provision of requisite skills. lgl