The Federal Reserve is now our new Central Planning Committee

[angrydude]

For anyone out there who still believes America is a market-based economy.


Federal Reserve to gain power under plan
http://www.washingtontimes.com/news/2009/jun/16/plan-gives-fed-sweeping-power-over-companies/?feat=home_headlines

The Federal Reserve, already arguably the most powerful agency in the U.S. government, will get sweeping new authority to regulate any company whose failure could endanger the U.S. economy and markets under the Obama administration's regulatory overhaul plan.

The final plan due to be released on Wednesday -- which originally aimed to streamline and consolidate banking and securities regulation in one or two agencies -- now is expected to sidestep most jurisdictional disputes and simply impose across the board standards to be applied by all financial regulators, according to administration and industry sources.

...


The FED makes it rain money and the solution is to give them the power to determine how wet we're allowed to get.

[FaithInOne]

lol Obama. The dude just doesn't care where america will be in 50 years.

Same ol' politician :depressed aww shucks

[ChumpDumper]

What's your idea for avoiding the kind of meltdown that happened last fall?

[Viva Las Espuelas]

is this the one that obama "intends" to "protect" the consumer?

[Viva Las Espuelas]

What's your idea for avoiding the kind of meltdown that happened last fall?
i think it's above his pay grade to divulge that info, spoonfed.

[ChumpDumper]

i think it's above his pay grade to divulge that info, spoonfed.So what is your idea then?




Anyone?




Bueller?

[FaithInOne]

Dump the chumps.

The F-n-1 Doctrine for a new America.

[SnakeBoy]

Without a doubt the Fed needs an overhaul. Devil is in the details though.

[angrydude]

What's your idea for avoiding the kind of meltdown that happened last fall?

Don't let the FED F*uck around with interest rates.

outlaw quantitative easing

And keep the regulators independent from people they should be regulating.
(The FED is a bank. You don't make the arsonist the fireman).

Little bumps in the business cycle are far more desirable than the bubble and burst economy we've got going on.

[ChumpDumper]

So who sets interest rates?

[angrydude]

So who sets interest rates?

ideally the market.

That failing, pick a rate a stick with it.

Require an act of Congress to change it. (that way it'll never happen)

live with the results. Yes that will restrict the economy's growth, it'll also restrict how far the economy can blow up.

[ChumpDumper]

The market?

Meaning all the banks?

[SnakeBoy]

So who sets interest rates?

There should be a set formula for setting interest rates instead of whatever one man feels like doing. Greenspan could have avoided alot of this if he would have raised interest rates like he should have. Bernanke initially resisted lowering interest rates but then changed his mind...political pressure? IDK.

[Winehole23]

That failing, pick a rate a stick with it.Fail.


Require an act of Congress to change it. (that way it'll never happen)Moronic fail.

[ChumpDumper]

There should be a set formula for setting interest rates instead of whatever one man feels like doing. Greenspan could have avoided alot of this if he would have raised interest rates like he should have. Bernanke initially resisted lowering interest rates but then changed his mind...political pressure? IDK.What would be the point in raising rates with the economy in the shitter and negligible (so far) inflation?

What would the formula be?

[angrydude]

The market?

Meaning all the banks?

use a computer.

[ChumpDumper]

So you're trying to get me to say yes so you can point out thats what we do now.No. I'm just trying to get an idea of what you are actually wanting.

[angrydude]

No. I'm just trying to get an idea of what you are actually wanting.

some other objective force than a small group of individuals who can easily screw up.

Or I guess how it works now is just fine and dandy. Being told that unless we bail out the banks in 2 weeks the entire economy would have collapsed is probably for the best.

I don't know what that is, I don't have to know what that is. I do know its not impossible.

[SnakeBoy]

What would the formula be?

I'm not that smart. Seems to me though that it should be possible to use a variety of economic indicators to come up with a number (or range which would leave at least some flexibility for the fed). Clearly though, Greenspan should have raised interest rates to control the housing bubble.


What would be the point in raising rates with the economy in the shitter and negligible (so far) inflation?


I'm not talking about right now. I mean in the future after we finally climb out of the shitter. To prevent it from happening again. You don't put your seatbelt on right after you crash but after you get out of the hospital you do if your smart.

[ChumpDumper]

some other objective force than a small group of individuals who can easily screw up.Some amazing, infallible formula!


Or I guess how it works now is just fine and dandy. Being told that unless we bail out the banks in 2 weeks the entire economy would have collapsed is probably for the best.Well, that's what Bush's men thought. When the men who consider Ayn Rand books as Bibles think that the economy will collapse, I pay attention.

[coyotes_geek]

Just to make sure I've got this straight, the plan is to give a group of non-elected presidential appointees the power to arbitrarily decide who's failure would endanger the economy and who's wouldn't. They would then have the power to take over that company, presumably whether that company wanted them to or not, and could then just create money out of thin air to "loan" said company and there's not a thing that voters, taxpayers or congress could do about it. It's TARP without those pesky checks and balances. We'll just make the Fed your one stop bailout shop.

[angrydude]

Well, that's what Bush's men thought. When the men who consider Ayn Rand books as Bibles think that the economy will collapse, I pay attention.

So Obama would have let them fail?


There's no difference. Everyone is in it together. The only thing that will actually change things is a change in the structure.

[ChumpDumper]

I'm not that smart. Seems to me though that it should be possible to use a variety of economic indicators to come up with a number (or range which would leave at least some flexibility for the fed). Clearly though, Greenspan should have raised interest rates to control the housing bubble.Possible. It was a weird economy with the war and all. Rates were definitely an issue, but I'm not sure it was the biggest one.


I'm not talking about right now. I mean in the future after we finally climb out of the shitter. To prevent it from happening again. You don't put your seatbelt on right after you crash but after you get out of the hospital you do if your smart.Oh, I imagine the rates will increase once the inflation hits.

[SnakeBoy]

Some amazing, infallible formula!


On second thought, you're right. Mathmatics has no place in economics. Better to go with the gut.

[ChumpDumper]

On second thought, you're right. Mathmatics has no place in economics. Better to go with the gut.Were it that simple, don't you think it would have been done somewhere in the world sometime in history?

[angrydude]

Oh, I imagine the rates will increase once the inflation hits.

You think? And then we'll all be poor.

[ChumpDumper]

You think? And then we'll all be poor.Why will we all be poor?

[angrydude]

Were it that simple, don't you think it would have been done somewhere in the world sometime in history?

The world has never had this sort of fiat currency before.

[ChumpDumper]

The world has never had this sort of fiat currency before.They've had it for several decades now.

[angrydude]

Why will we all be poor?

like you said, when the inflation hits and interest rates go up we won't be able to afford our imports. We won't have the production means right away to make them ourselves (if we ever do), and so we won't have as much stuff. In other words we'll be poor.

[angrydude]

They've had it for several decades now.


Yea, the 1970's is ancient history. So much time to analyze what's really going to happen when you go down this path.

[ChumpDumper]

like you said, when the inflation hits and interest rates go up we won't be able to afford our imports. We won't have the production means right away to make them ourselves (if we ever do), and so we won't have as much stuff. In other words we'll be poor.So I guess there's nothing to do but kill yourself.

I don't think it will be as apocalyptic as that.

[ChumpDumper]

Yea, the 1970's is ancient history. So much time to analyze what's really going to happen when you go down this path.Time enough to jot down your God Formula.

[angrydude]

Time enough to jot down your God Formula.


I'm sorry for not being infallible.

[ChumpDumper]

I'm sorry for not being infallible.But the God Formula is!

[angrydude]

But the God Formula is!

You're the one who coined that term.

[angrydude]

And I only ever said I wanted something good enough. Not perfect.

[ChumpDumper]

You're the one who coined that term.You're the one who said how awesome it would be.

[angrydude]

You're the one who said how awesome it would be.

Again, I'm sorry I believe what I say.

[ChumpDumper]

Oh, I know you believe. It's good to have faith in God Formula.

[angrydude]

Oh, I know you believe. It's good to have faith in God Formula.

Just like its good to have faith in Bernanke

[SnakeBoy]

Were it that simple, don't you think it would have been done somewhere in the world sometime in history?

Well I don't think it would be a simple formula but shouldn't it be possible to come up real measures of the economy, look at economic history and then come up with a range of where interest rates should be given the economic realities? It could be a rather large range to give plenty of flexibility but still take reality into account.

I actually have some faith in Bernanke. I think when the time is right he'll be as ruthless as Volkner with interest rates. It's the guys after Bernanke leaves that I worry about.

[ChumpDumper]

Well I don't think it would be a simple formula but shouldn't it be possible to come up real measures of the economy, look at economic history and then come up with a range of where interest rates should be given the economic realities? It could be a rather large range to give plenty of flexibility but still take reality into account.I think it kind of works like that already.


I actually have some faith in Bernanke. I think when the time is right he'll be as ruthless as Volkner with interest rates. It's the guys after Bernanke leaves that I worry about.I feel the same way, but one can never be sure.

[SnakeBoy]

I think it kind of works like that already.


Not under Greenspan it didn't.

[ChumpDumper]

Not under Greenspan it didn't.Like I said, it was a weird economy.

[SnakeBoy]

Like I said, it was a weird economy.

That's why there needs to be some restriction on the Feds ability to manipulate interest rates. Think about it, if the magic formula would have said interest rates had to be between 8 - 12% then not only would it have limited the size of the bubble but it would have forced Bush to address some of the glaring weaknesses in our economy instead riding the housing bubble and declaring everything was just peachy.

[ChumpDumper]

What part of the formula would have determined that rates should have been that high?

[SnakeBoy]

Eh, you're impossible. I already said I'm not that smart but little things like this might have indicated that money was just a tad too cheap...


http://graphics8.nytimes.com/images/2005/08/21/business/21real.graphic.gif
http://idorfman.com/Charts/DebtToIncomeRatio.jpg