An idea whose time has come?
The Austrian school (along with every other school) of economic thinking has been bowdlerised to remove the bits of thought neo-liberals don’t like but there’s plenty of sound logic there.
“money is different”
That’s the key idea behind the Chicago Plan.
Money is the playing field.
You can’t have players that are also umpires and the Austrians knew this.
If the last 20 odd years have taught us anything it is that :
BANKS CANNOT BE TRUSTED TO CREATE MONEY
End of.
And the reason is as plain as the nose on your face.
Moral hazard.
Commercial banks make more profits the more they lend.
So they ALWAYS lean into bubbles because bubbles are where the big bucks are.
This turns what might be quite a mild business cycle into a guaranteed boom and bust.
“Oh… but what about regulation” I hear you cry.
It doesn’t work. It doesn’t ever work because human nature is what it is.
IF
You have financial power
AND
You can buy influence
THEN
You will use it to advance your goals
That is human nature. There is NO WAY to change this. Politcians will be influenced, regulatory bodies will be penetrated and before you know it the bankers will be back to writing regulations for themselves again.
I mean… Basel III. The “Gold Standard” for capital adequacy.
PMSL. Credit Suisse much?
Written by bankers for bankers.
No. No. No.
There is only one way to cut the f*****s off at the pass and that is to outlaw the private creation of money.
Stand in front of a mirror and say it out loud “Private creation of money”.
It’s as stupid in reality as it sounds as a concept.
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