August 11, 2004
Free Market Miracle #0005
The Federal Reserve yesterday pushed its benchmark short-term interest rate up a quarter-point to 1.5 percent, reaffirming its belief that the economy is recovering despite July's dismal job-growth figures.
Citigroup, J.P. Morgan Chase, Bank of America, Wells Fargo, Wachovia, U.S. Bancorp and other lenders followed by raising their prime lending rates a quarter-point to 4.5 percent from 4.25 percent set in June.
...
The increase was at odds with the Fed's upbeat forecast about inflation, said John Silvia, chief economist at Wachovia in Charlotte, N.C. He said it showed the long-term commitment -- in spite of mixed economic news -- to getting the rate back to the 4 percent "neutral" level that neither stimulates nor constrains the economy.
Meanwhile:
Investors sent stocks sharply higher yesterday after the Federal Reserve reassured Wall Street that economic growth would continue despite a recent slowdown and a surge in oil prices.
Waitasecond. You mean to say that interest rates are determined not by the Free Market, but by an un-elected board of "governors"? And that the "Invisible Hand" won't naturally determine the appropriate rate of inflation? And that the activities of the world's most famous "market", the New York Stock Exchange, are directly correlated with the policy decisions of the aforementioned un-elected board of "governors"?
What the fuck? Can't Newt Gingrich do something about this?
Posted by Eddie Tews at August 11, 2004 05:50 PM
Comments
LOL!! just peforming my bi-annual checkup on the retarded shit Eddie puts up here, and he never ceases to give me a good laugh, especially with this latest post. Just when I thought it wasn't possible for Eddie to spout off about something he knew less about than the world, he decided to post about economics and our money/banking system and proved me oh so wrong. Eddie, if your ignorant ass had ever taken an upper level economics class, particularly money and banking courses, you would understand how our economy works; the need to put up posts that make you look stupid would disappear. The "Invisible Hand" does NOT describe our economy, nor would anyone with half a brain in their head claim that it does. Yes, Capitalism is loosely based on that concept, but that's as far as it goes. Our economy is carefully regulated by people who have studied, unlike you. It will never be perfect as long as there are lazy, whining niggers like yourself out there who drag the rest of us down and burden us with taxes (to redistribute wealth) and proposals of socialism, but we true red, white and blue Americans are doing the best we can. Get off your lazy, whining bitch ass and do something with your life instead of complaining all the time. You might even get laid once in a while if you try this. Dipshit. -- Posted by: Greg Taylor on August 12, 2004 10:36 AM
"The "Invisible Hand" does NOT describe our economy, nor would anyone with half a brain in their head claim that it does. Yes, Capitalism is loosely based on that concept, but that's as far as it goes. Our economy is carefully regulated by people who have studied,"
~Actually Greg, Capitalism is strongly based on the invisible hand. Everything from comparative advantage (the basis of free trade) to determining wages and what is produced are all determind by the invisible hand, well, at least according to the capitalists who have studied the subject. Doesn't it bother you Greg that capitalism is heavily based on the invisible hand, when in reality much of economics is based upon the forced hand of the government?
I believe Eddie is doing an excellent job pointing out the modern problem's. Determining the problem is the first step to creating a solution. -- Posted by: Robert Hardy on August 12, 2004 12:11 PM
I guess we can add "Robert Hardy" to the list of people who know nothing about the U.S. economy or the world economy. I also wonder if Bob Hardy here realized he proved my point when he said "much of economics is based on the forced hand of the government." well Bob, if "much" of economics is based on the forced hand of government, then "capitalists who have studied the subject" must surely realize that the very reason economics is a "subject" is because the "forced hand of the government" so thoroughly pervades our marketplace that we must study the effects of the competing forces of the invisible hand and the forced hand of the government. do you see your contradiction yet or do I need to go on?
I also think it's humorous that you cite "determining wages" as a product of the invisible hand. Ever heard of minimum wage? Do you know what a minimum wage does? It creates unemployment. Why? Because employers are forced to pay their employees wages which are higher than the market-clearing (i.e. equilibrium) wage. Since employers must now pay more per worker than the market would bear under the invisible hand, the result is that fewer people are then employed. This guarantees that the market in question will ALWAYS have SOME unemployment, since the demand for labor (the element controlled by the employers) is now less than the supply of labor (the element the workers control). This creates what is known as a dead weight loss in the labor market, and it is caused by the artificially inflated minimum wage. I figured Eddie would know something about this, since as far as I could gather his last job was as a dishwasher at a country club.
Our economy is replete with examples of the "invisible hand" being contested. Price ceilings (e.g. rent controls), price floors (e.g. guaranteed prices for crops), anti-trust law, etc. etc. are all examples of the invisible hand not having its way. If the "invisible hand" were an accurate model of our economy, there would be one monopolistic company controlling each sector of industry. These, Bob Hardy, are FACTS.
I do believe, my good man, you just got slam dunked.
Next time I recommend you know something about the subject before you shoot of your mouth. You, and Eddie, are wrong. As usual. QED -- Posted by: Greg Taylor on April 4, 2005 10:26 PM