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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: Ilaine who wrote (35545)	11/8/1998 5:48:00 AM
From: accountclosed	Respond to of 132070

Coby, your post is interesting. I don't really have a head on response. But it brings to mind something I usually think about re: Greenspan. That is: Isn't there a crisis of definition of what the Fed is about here? It was originally chartered to preserve stability of the U.S. banking system. The implied charter has grown to fight inflation and deflation(preserve stable business conditions), regulate the stability of the bond market so Uncle Sam can sell its bonds, defend the value of the greenback, and on and on etc. ad infinitum. Over the last several years, slowly but surely the amount of emphasis on overseas business conditions and markets has become a greater emphasis. Afterall, they are our business partners is the justification. So you have a Fed that needs to keep its eye on hundreds of aspects of the domestic economy, but at the same time being watchdog for economies in all corners of the world. When we bail out Continental Illinois we are at a fairly immediate level defending the banking system. When we get to LTCM, we are at a meta-level. And the same Fed that defends the dollar, jumps into to support the Yen at other times. I am a little of a hypocrite in my own thinking because I used to opine that what Greenspan did wrong was not realize that monetary policy had to account for the new "one world" economic order. Now I just wonder "What should the Fed's job be"? (and you accuse me of being an early bird?)

To: Ilaine who wrote (35545)	11/8/1998 6:44:00 AM
From: heraclitus	Read Replies (1) \| Respond to of 132070

CB, You seem to use the term "Fed" and "the government" interchangeably. My understanding is that the Fed in not a US government agency. Is this true? If the Fed in not a government agency, them who's money are they using for these "interventions"? homer

To: Ilaine who wrote (35545)	11/8/1998 8:06:00 AM
From: Skeeter Bug	Read Replies (1) \| Respond to of 132070

cb, i asked two different school voucher supporters whether they would support a phased in voucher program beginning with the financially neediest students and nobody answered whether they would support it. benefits: 1. public schools would have time to react to a change in admissions. 2. private schools would have time to react to changes in admissions. 3. public school system would be in competition and have time to positively react to such competition. 4. education as a whole would be improved. costs: 1. well off and middle class kids wouldn't get an immediate benefit of reduced private school tuition. my belief is that the single cost is enough to scare most people away from the many benefits. a wholesale swap would be disasterous for the avg public school. this is an important issue unless you don't have to deal with public schools AND you don't care about those that do.

To: Ilaine who wrote (35545)	11/8/1998 10:40:00 AM
From: Mike M2	Read Replies (2) \| Respond to of 132070

CB, Richebacher was the chief economist at Dresdner bank but retired. He now writes one of the finest newsletters that I have ever read. The following is from Schumpeter's " Business Cycles" back cover " The central idea underlying Schumpeter's analysis of how the economic system generates the force which incessantly transforms it, is the importance of an entreprenurial elite for change and growth, for the business cycle, and for the survival of capitalism. Innovation- the application of new ideas in technique and organization which effect changes in the production function -is the strategic element in entreprenurial activity. Innovation brakes the circular flow of the stationary economy and generates economic development with a new equillibrium position at higher levels of income. Clusters of innovation, reinforced by imitators and speculators, cause cyclical movements with the economy pulsating to the threefold rhythm of the 3 year Kitchin cycle ( identified with inventory accumulation and decumulation) , the 8-11 year juglar cycle ( related to individual innovations) and the long Kondratieff cycle ( caused by the appearance of major innovations) . What Schumpeter calls " creative destruction" Will calls entreprenurial tough love . ho ho ho BTW a great source for books is fraserbooks.com Will's library of gloom and doom has many books from there. Mike

To: Ilaine who wrote (35545)	11/8/1998 1:09:00 PM
From: Knighty Tin	Respond to of 132070

CB, It is definitely Kurt Richebacher. Of course the Fed has to provide cash and credit. The question is how much. Just as the utility co. has to provide electricity. But you don't wnat them to provide so much juice that they burn down the town. BAsically, there has to be a relationship between real economic growth and money creation. When you create so much money that it cannot be absorbed by the real economy, it creates either financial asset or consumer inflation bubbles. In the 1970s it was the latter. In the 1920s and the 1990s, it was and is the former. And all bubbles pop disastrously. MB