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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: bentway who wrote (775999)	3/23/2014 1:33:38 AM
From: Bilow	Respond to of 1574489

Hi bentway; Re: "There were MUCH WORSE booms and busts, happening much more frequently. The Fed was created to moderate them. Which history shows, it HAS."; The Fed was created in 1913. The US before 1913 and the US after 1913 were not in any way comparable. Before 1913 the US was largely agricultural. Since 1913, and especially since 1940 or so, the US has become much more industrial. So any comparison between our economic history before and after the creation of the Fed cannot be used to show that the Fed had an effect. What you're doing is making a conclusion that the data simply cannot support. A better example would be two similar countries, one with the US Federal Reserve, the other without, and which were otherwise identical in 1913. But of course that's an impossible test. The fact is that we can never know if the Fed helps reduce booms and busts or increases them. But we do know a few things by comparing different countries. Great depressions are universal. They cross country boundaries. They effect countries with central banks and they effect countries without. But what has been noticed in that data is that the big depressions effect the agricultural countries more than they do the leading industrialized countries. What we say nowadays is that when the US gets a cold, the countries that rely on exports of agricultural and mineral resources get the flu. -- Carl By the way, the point I was making about the fact that the US had booms and busts before the Fed was created is supported by the data. The claim by my opposition was that the booms and busts since 1913 were caused by the Fed. I simply pointed out that booms and busts long preceded the Fed so the Fed cannot be the only cause of these things and there is no logical reason to conclude that destroying the Fed would stop booms and busts from happening (or being less severe). And really, it is true that modern recessions are extremely mild compared to the bone wrenching crashes we had before 1913.