Your criticism is fair. I do disagree to the point of finding the topic uninteresting. In dynamical systems, for instance, a controller acting instantaneously would bring INstability rather than the desired performance. In addition, consider a car driver that receives constant "feedback" from observers --- would (s)he not end up in a ditch? Consider also what would happen if I were to demand that, any time you THINK about something, you report it verbatim to me. You'd never be able to come up with any decision.
In sum, the idea that transparency is a universal good is simply false. Most posters essentially state so' that's how we live now, as opposed to 1300, someone said. This is silly, and I am delighted that those flying the space shuttle are not subject to "transparency" of this kind.
The second point is, that Fed is a controller of a dynamical system (the economy). One can argue, of course, about a better design of a controller, but one has to (i) understand what it is and (ii) know something about the subject matter (no, finance will not do by itself).
The harsh tone was caused by precisely that. Every time you listen to the news, you observe not only the dismantling of the country --- but for absolutely false reasons and by ignorant people. "Capitalism is bad, markets are bad, hedge funds --- not enough transparency, CEOs make too much money, etc." Most do not even know what these words mean.
So I turn to my fellow "conservatives," and what happens? The same rants, and with equal ignorance, speaking of complex issues as if they were self-evident. No, sir/madam, if you choose to DISMANTLE something that worked and continues to work, the onus is on YOU to provide justifications, not me. Hence the harsh tone: what am I supposed to feel when I see "conservatives" acting in the same way and in the same directions and the socialists that are now in power. Nor there anything new here: great many people on this board are "conservative" in everything but economics, which they do not understand. Witness the criticism of Bush in 2002 that HE does not provide jobs, the rants about CEO pay in the last few years, and one even proudly signing of as "right-winger except for economics" (as if such thing existed).
My country is so ignorant and so much to the left that even those who fancy themselves conservative work in the same direction. What tone am I supposed to adopt against what amounts to defamation?
I accept, however, that the conversation did not start along constructive lines. Perhaps, we'll meet under better circumstances.
Thank you for your reply.
TopQuark - I get your drift. And I can see how these topics could tick off a good guy. You have been clear in your words so I will try to do the same.
If I understand the crux of your argument correctly, that there are smart people (the Fed) who spend all their time focusing (like a laser beam) on economic policy, and by virtue of qualification, valorous detachment and time spent, they are more qualified than any other alternative for which you have seen argued. Did I get that right?
Assuming the answer is yes, here is an argument to persuade you to look at my position. I repeat the time honored contention that no man or group of men can devise a system that can deal with the millions of daily decisions that each of us make in the marketplace. The best that ‘man’ can do is ensure no other man is in a position of unfair advantage. Either by coercion or access to information unavailable to his cohorts. Ultimately only the non-person known as the “marketplace” contains the wisdom for the subject at hand.
The Fed should simply determine the demand for dollars and supply or remove that amount, thus keeping the value of the dollar stable. If you want to know how this should be done I would be happy to tell you. (or go here for the big picture and save me the work!: www.polyconomics.com)
The reason this is not done is pretty simple. People are getting rich today (and for many years) with this system in place. A simple transparent solution eliminates the need for a ‘Fed’ in the first place. A computer program could easily do this work. But it would be transparent and thus remove the monetary advantage currently held by those with political/informational access. Asymmetrical information is what keeps the Fed (and Fed insiders) in business. Without it they would wither on the vine.
John Baptiste Say, Jude Wanniski, Edmund Burke, Ibn Taymiyyah, et al have made the historical proposals that inform my understanding. The Fed is insular and more importantly, inherently politicized no matter what it’s supporters/defenders would like to believe. They have one arrow (interest rates) with which to hit two targets (unemployment and inflation/deflation) and will never publicize in advance what decisions they will make. It is no wonder why they are not succeeding.
To say they can succeed with their mission, this time(!), only with continued secrecy is absurd. They have failed. They were destined to fail. And in doing so have enriched insiders with illicit gains extracted (quietly) from dollar holders all across the globe. Including both of us. I want a scalp. What about you?
Kind regards,
Steeltrap