Thread necro, but this is a very decent, if somewhat technical, article by Larry Summers.
Read that over my toast and marmalade this morning.
Bankers not able to control rampant disaster capitalism. Who knew?
That is not the point of monetary policy. The Central Bank is the policy arm of the Government. The regulator role was foisted on the BoE after the last debacle, which was only partly of our marking.
Implementation of monetary policy in planned/Socialist economies is historically orders of magnitude worse (rampant inflation/theft or seignorage for personal profit) and sometimes downright disastrous (famines etc).
Any attempt at adjustment of rates etc is another way of saying controlling IMV. Various bodies, state and corporate, are always tweaking the edges of the system for it to better serve themselves usually.
If capitalism was the wonder of the age that its supporters claim it to be it would just work. Rather we see a system conceived of at least a century ago, when the world operated very differently, that is serving a small, select few. It is next to useless for the modern world.
I didnât mention Socialist systems, you did.
Fair enough. If you can think of an alternative to Capitalism that isnât Socialist or fully planned, and that wasnât a feckinâ disaster, let me know what it is. Iâm fecked if I can think of any other alternative system.
However, the purpose of monetary policy is to control price fluctuations (when properly applied). High inflation is inherently damaging and from a welfare point of view impacts most on the least well off. The Thatcher/Reagan monetary experiment notwithstanding (or Lawsonâs punting on the DM for that matter), proper independent monetary policy should and can be used to support an economy in times of need. The trade-off of high-inflation for low unemployment still exists (although the gig economy masks this with its own nasty set of problems). The point of the article is that the current set of tools donât appear to work given near zero real interest rates (and negative real forward rates). This is seriously problematic unless addressed given the increased risks of downturn, see Japan since 1990 for the reasons why.
Does capitalism demand GDP increase all the time? If so, what do we need to do to remove the exploitation of finite resources and environmental decline from the equation and ensure that all benefit equally, on a global scale.
In nominal terms yes as long as populations are rising and standards of living are to be maintained.
Two questions really. I think that, in terms of the environment, you need to properly cost the environmental decline. For example, ruling out bogus discounting wheezes that render the costs of future cleanup zero would be a start. This type of (mal) practice renders Nuclear power stations economically viable. This requires that we vote for change to our accounting laws though.
Redistribution is straightforward. Tax excessive wealth and break up the new monoplies. This requires that we vote for change, impose this on our legislators and redraft our anti-trust laws.
It is not just a question of Capitalism being at fault; there are also social and political forces at play.
A rose by any other nameâŚ
I donât give a flying fuck what itâs called. Call it The Third Way if you like, oh hang onâŚ
The primary objective is that it serves everybody. And not by âtrickle downâ â a rising tide lift all boatsâ or any other damned excuse the wealthy have used for years to justify their privilege and greed.
Taxing the rich is a start but how about a proper sharing of wealth whereby people donât need to be taxed at ridiculous rates to compensate for the fact that theyâre robbing the rest of us.
And any decent system needs to be based on reality rather than pretend money.
Most importantly we need a system that doesnât crash and burn every so often causing misery for millions.
All systems are rigged, itâs unavoidable. It just needs rigging for the majorityâs benefit.
Iâm afraid the current system is the âbestâ we have got. The redistribution is what weâve voted for. People believe the small Govt/low tax/trickle down economics lie and so vote for it. Then they get uppity about the NHS falling over. An inherent problem with democracy is that it is only as smart as the median voter.
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We know from history when societies get very unequal and blatantly unfair violence is not far behind.
just sayinâ
That is a separate issue to Capitalism though. Russian GDP went through the roof in the 1930s but consumption per capita collapsed at the same time. Growth and redistribution are separate matters. You grow enough to bake a bigger pie. Then you vote on how to cut it up or the bloke with the knife will take the lot.
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Itâs OK. When the nukes are gone we can cover baseload with gas turbines. Thank heavens cleaning up after fossil fuels isnât going to cost us much âŚ
VB
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Budget today. Iâm expecting quite a lot of stimulus stuff today - please god not eat out to help out again - with the tax ass-reaming coming down the line next year.
Tax allowances frozen this year is my bet. If he goes for a tax grab too early people just wont go out and spend.
Dear Chancellor please make it very easy and affordable for someone to buy my house this summer and inflate its value while youâre at it.
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Pls gib EV incentive I can use before I pick mine up on Friday 
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Anything that avoids another lunatic period of austerity please!
I hope we can ignore the size of the debt this year and so concentrate on the recovery. Keeping an eye on the deficit might be a decent idea, but that should self correct as the economy opens up again. Dealing with the debt too early will only harm the recovery and exacerbate the deficit. We can deal with the debt once the economy is on firmer ground.
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Austerity wasnât required before, it was an opportune moment for the Tories to do what they wanted to do. They only reason they donât clamp down harder is because at some point the plebs canât afford sky or shopping and our shite economy will collapse.
That sounds to much like a Labour policy, heâll do something to make sure that daft Tory wet dream of a prudent chancellor ensures. Some tax raising is inevitable.
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My wish is a further yearâs postponement of the IR35 rules. 