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

To: Freedom Fighter who wrote (57510)	4/26/1999 8:31:00 PM
From: Merritt	Read Replies (1) \| Respond to of 132070

WC: (good thing we're not in Britain<g>) <<< It is almost entirely AG's and reckless promotion from a few on Wall St that's to blame for this mess. >>> I don't agree with that assessment; who's AG's boss? Who keeps mindlessly throwing money at the Index Funds? It can be said that without AG having provided a safety net last October, people wouldn't have the confidence to indulge their greed, but...I don't think AG acted entirely on his own...Clinton, his boss, had the most to gain, from the market not crashing. Remember, he was in the midst of the impeachment hearings, and a market crash would have put his poll ratings in the sewer, and those stalwarts in the Senate probably would have found him guilty. AG continues to add liquidity to the market, IMHO, because his boss sees a booming economy as the only chance he has of rehabilitating his image.

To: Freedom Fighter who wrote (57510)	4/26/1999 10:17:00 PM
From: Don Lloyd	Read Replies (1) \| Respond to of 132070

Wayne - (...The key question for us all is just how irresponsible is he...) I question how you can reconcile your opinion of AG with the clear (to me) indication that he is almost certain to be the most Austrian economist to ever serve in the Federal Government. He favors the gold standard, or at least a close equivalent. Many of his speeches seem to have been lifted directly from Mises, with the economy based on the satisfaction of the subjective choices of consumers. He has clearly opposed many of the farces advanced by the Clinton Administration. He believes that the proper rate of taxation on investments is zero and that the best form of near term tax relief is an across the board rate reduction. Even more than tax reduction, he prefers limitations in government spending and market interference. I suspect that all of your objections come down to money supply and credit expansion. Throughout the decade, he has faced criticism for keeping interest rates too high. By historical measures, the real rates have appeared to be high. Certainly by current geographic standards, real U.S. rates are high. He is not a free agent, by any means. The economy is a complex, non-linear dynamic feedback system. It simply cannot be effectively controlled by the few tools available to the Fed, and even a hint of any kind of Fed action disrupts the markets. Part of the problem is that both the markets and people in general believe that the economy is subject to control, and their confidence depends on the Fed seeming to be in control. Not being an expert by any means, I suspect that credit is in part made available by the actions of the markets themselves, and is not strictly the result of Fed action or inaction. The basic Austrian theory of the credit boom is that government reduces the interest rate below normal levels and this causes the higher order capital goods sector of the economy to over-invest. Any action taken to undo this by increasing interest rates will also first impact the capital goods sector, leading to a severe economic contraction. The Fed only has a small selection of hammers, but no tweezers. Different parts of the economy are in much different states at any given time. The Fed can only affect the economy overall. The market itself must decide where and when to supply credit. Regards, Don

To: Freedom Fighter who wrote (57510)	4/26/1999 10:21:00 PM
From: Giordano Bruno	Read Replies (1) \| Respond to of 132070

Another nod and a wink : NEW YORK, April 26 (Reuters) - Federal Reserve Bank of New York President William McDonough said on Monday the odds of a severe stock market drop hurting the U.S. economy are low. ''The likelihood of a serious problem coming to the U.S. economy from the stock market is possible but not very high,'' McDonough said when asked about the impact of the U.S. stock market on the U.S. economy.. McDonough was addressing the Lincoln Center Business Council here.