How are the Republicans going to frame the debate in 2016?

[boneyard bill]

You should be more worried now because the Global Economy is soon going to take another massive dump.

The entire system was nearly destroyed in 2008. I know you love your economic armageddon scenarios, but facts be told, it took a big ass amount of intervention to save the global economy in '08. It may slow down, but it almost can't get worse than '08, I mean without Ted Cruz being in charge when it happens.

...and the reason we have not had a real recovery is because we have never fixed the problems from the last dump. When the economy goes South, people and businesses need to pay off (or liquidate) debt, save money, and rebuild their finances. Bailing out insolvent banks and then keeping them afloat with printed money while keeping interest rates ultra low to discourage savings and encourage yet more debt, is not the way to fix the problems.

I know. The soln was to let all the banks disappear, put tens of trillions into limbo, and then let the free market solve all the problems.

That's pretty much it. Let consumers and producers get out of debt. That may lead to bankruptcies and reorganizations which usually take a year or two. But then the economy begins to boom. As it is we've had 5 years of pretty much no growth because those bankruptcies and reorganizations were never allowed to occur. So now we're going to face even bigger bankruptcies and far more difficult reorganizations even if the dollar doesn't collapse as result of our policies. If the dollar goes too, we'll be looking at much lower standards of living for a long, long time.

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The real question is why Democrats aren't running on it. I don't know of a single Democrat in a close race who dares to raise the issue. They know its a loser because Obama would be blamed. This is defensive White House propaganda. Even Hillary doesn't raise the issue.

I suspect this is RW disinformation aimed at independents.

Elizabeth Warren, the poster child for income inequality, has stumped for Braley in Iowa, and raising the minimum wage is on his web site.

I'm not going to bother checking the other critical races, but I'd be very surprised if they're substantially different.

Most Republicans seem to be personalizing the issue. Why are YOU worse off? That's hits home to people more than and abstract "income inequality" issue.

That's just Reagan's old line from 1980. Same old.

Reagan knew how to win elections.

 

[Ford]

The soln was to let all the banks disappear, put tens of trillions into limbo, and then let the free market solve all the problems.

That's pretty much it.

So let me see if I've got you right on this...

The solution is to completely destroy the economy, and the problem with our current recovery is that we didn't do enough damage.

Wipe out the banks, Wall Street, everyone's savings, and then we'll start fresh with...?

 

[boneyard bill]

That's pretty much it.

So let me see if I've got you right on this...

The solution is to completely destroy the economy, and the problem with our current recovery is that we didn't do enough damage.

Wipe out the banks, Wall Street, everyone's savings, and then we'll start fresh with...?

When the downturn hits, the damage has already been done. The solution is not to continue the policies that caused the downturn. The solution is to reverse those policies. The damage was done by the Bush administration's excess money creation. That excess money needed to be squeezed out of the economy. Instead, Obama and the Fed decided that we needed even MORE money creation. That has never worked and the degree of money creation has been absolutely, and hugely unprecedented. Yes, it has saved the banks, but meanwhile everyone else is sinking.

 

[Ford]

So let me see if I've got you right on this...

The solution is to completely destroy the economy, and the problem with our current recovery is that we didn't do enough damage.

Wipe out the banks, Wall Street, everyone's savings, and then we'll start fresh with...?

When the downturn hits, the damage has already been done.

Okay, so you figure Economic Downturn 2.0 is a given. But that didn't really answer my question. You seem to be saying that in order to stave off disaster, we need to preemptively destroy the whole edifice and start from a new "free market" point.

The solution is not to continue the policies that caused the downturn. The solution is to reverse those policies

.


So we should break up the "too big to fail" banks and reinstate the wall between investment banking and consumer banking that was knocked down during the Clinton administration?

The damage was done by the Bush administration's excess money creation.

Of the many economic sins of the Bush administration, I'd put monetary policy at the bottom.

 

[boneyard bill]

When the downturn hits, the damage has already been done.

Okay, so you figure Economic Downturn 2.0 is a given. But that didn't really answer my question. You seem to be saying that in order to stave off disaster, we need to preemptively destroy the whole edifice and start from a new "free market" point.

No. I'm saying that would not stave off disaster. The damage has already been done, and I wouldn't destroy the whole edifice, but I would get rid of a good deal of it.

Value is subjective. That is one of the underlying principles of modern economics. Since value is subjective, you need a market to determine the price. The price of money is called "interest." If you have the Fed manipulating interest rates (and you do), then no one really knows the value of money or the true value of most other assets in your economy because interest rates influence all asset values. Consequently, rule no. 1. Let the market set the rate of interest.

The solution is not to continue the policies that caused the downturn. The solution is to reverse those policies

.


So we should break up the "too big to fail" banks and reinstate the wall between investment banking and consumer banking that was knocked down during the Clinton administration?

We don't need to break up the too big to fail banks. If the Fed quit propping them up by buying their toxic assets and US treasury bonds, they would fail of their own accord. As long as we have the FDIC, we should regulate the activities of those banks that are insured by it just as any private insurer would. Any increase in risk should be accompanied compensating increases in the insurance rates. Had the rates been raised enough to compensate for the increased risk following Graham/Bliley, the union of commercial and investment banking probably wouldn't have occurred in the first place. However, I haven't seen any evidence that that was the major factor in precipitating the collapse of the real estate bubble in any case.

The damage was done by the Bush administration's excess money creation.

Of the many economic sins of the Bush administration, I'd put monetary policy at the bottom.

I'd put it at the top, however, you can't really separate monetary policy from the Fed from the other policies to encourage borrowing and lending that were part of Bush's "Opportunity Society" which amounted to encouraging people to buy homes that they couldn't afford.

The downturn that began in 2007 was the result of the collapse of the real estate bubble. That bubble was created by the low interest rate, easy money, loose lending standards policies created and promoted by the Bush Administration in cooperation with Alan Greenspan. All bubbles pop. So when you create a bubble, you are also creating the inevitable recession that follows. Obama/Bernanke/Yellen are following the exact same policies only even more recklessly so it won't end with a recession. It will end with something worse.