Monday, October 28, 2013

Beware the Panhandlers of an New Inflationary Panacea

Richard Eleling emails:

Dear Bob,

I have a new opinion article up on the "EpicTimes" website on, "Beware the Panhandlers of a New Inflationary Panacea."

I argue that proposals to "fix" America's slow economy and lackluster job creation through "little bit" of inflation is an illusion that can only result in potentially severe price inflation in the longer run,and which only sets the stage for another "boom" and "bust" of the business cycle.

It has been tried many times in the past, and always led to far more serious economic harm in the long run than any presumed "gain" in the short run.

1 comment:

  1. Alan Greenspan, Lincoln Savings, Control Fraud, and “Screwiness”

    Stewart’s sound rejoinder was that anyone would be incredulous when looking at a bank balance sheet leveraged 30:1. (Deutsche Bank is currently leveraged more than that.) The former Fed chairman spread a false narrative that dodges the reality that widespread interconnected control fraud was a major contributing factor to the financial crisis.

    One of the problems in the financial system is that perpetrators are rarely held responsible. Shareholders pay fines, and the DOJ rarely files criminal charges. Individuals get off even better than scot free. They are handsomely rewarded for crime. They net millions, sometimes tens of millions of dollars and subsequently land prestigious jobs.

    Failed regulators like Alan Greenspan express surprise at serial escalating failure, while claiming they’ve studied incentives and human nature. Greenspan may have missed the University of Chicago Crime Lab study. But is it even possible he missed the body of work done by other regulators during the front page S&L scandals?

    Today, bankers with malicious mischief on their minds have no effective deterrents. Instead, they have compelling monetary incentives for engaging in control fraud. Thanks to the muddled thinking of failed regulators like Alan Greenspan, these distorted incentives remain in place.