**** Elections thread *****

[a500lbgorilla]

Sadly



My wish was to live in boring times.

I don't think that's gonna pan out.

[wufwugy]

Sadly



My wish was to live in boring times.

I don't think that's gonna pan out.

The "bankerism" that is causing the economic doldrums that Dore discusses is not corruption so much as it's the failure of central banks to keep up the nominal growth trend. It's a failure of the Fed, ECB, and the BoJ to correctly diagnose their contractionary monetary policy. There are other issues as well, but they're all pretty small beans compared to monetary policy. Money is king. No kind of fiscal or regulatory policy can do much of anything to boost nominal growth if monetary policy does not allow/drive it. This was the same problem that created and deepened the Great Depression. It took many decades after the GD was finished for economists to begin correctly diagnosing it as a "monetary mechanism gone wrong" (Bernanke 2002). One may think that the lesson was learned and that central banks are held to task on monetary policy, but that is not the case. Nobody knows quite why they're let off the hook, but it probably has to do with fear of stagflation, political desires for fiscal and regulatory solutions, and relying on interest rates as a measure of monetary policy (they're not reliable).

The problem appears to be many other things, like trade and labor and banks, because that's what happens when money goes wrong. It's like if you have a bridge and you add more and more weight until it breaks. It will break at a specific point on the bridge first. This doesn't mean the bridge collapsed because it was faulty at that point. The bridge collapsed because too much weight was put on it. Money is like that weight in the economy. It affects everything, and that which breaks will appear faulty on its own, but the truth is that it wouldn't have broken if bad monetary policy wasn't crushing it.