Here’s a short list of what we should have learned but didn’t.Forbes — Pragmatic Economics
Four Lessons (Not) Learned From The Financial CrisisJohn T. Harvey | Professor of Economics, Texas Christian University
Here’s a short list of what we should have learned but didn’t.Forbes — Pragmatic Economics
1 comment:
J.T.Harvey claims an advantage of letting commercial banks create and lend out money is that borrowers don’t “need to wait for people to save up their money before it can be borrowed…”. Not true.
If commercial banks no longer created money, obviously demand would be INITIALLY decline. But that’s no problem: stimulus in the form of government and central bank creating and spending more base money into the economy would be easy to organize. Savers would allocate some of that extra money to various saving / investing organisations: the stock exchange, mutual funds, banks and so on. Those organisations would then have a constant stock of money to lend to the most viable borrowers, much as occurs now.
Moreover, under the existing system, money lenders (aka private banks) are the first to get access to new money. There is more reason for them to have that preferential access than there is for garages, restaurants, households or anyone else to have preferential access.
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