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1.
Geithner: He says that the US was having financial crisis all the time before the Fed was created. /// True statement. Economic regulation seems to be of “crises” as people refuse to act wisely without them.
Fact: The US has had many central banks before the Fed. /// True
The Fed was created in 1913. //// True.
The Great Depression happened in 1929. /// True.
2. His answer: “Because the president asked me too. Dodged the part about him making the wrong decisions. /// True. Moderator should have nailed him on that but its a Digg format. Given Geitners clear expertise, I think the dodge would only be continued.
Guilherme==whats your point before #2?
I have never commented on a blog before (but I do donate money)and I only comment because I feel the quality of this blog slipping.
This blog used to be all quality all the time, now when Guilherme Cherman posts something I just cringe. He is batting about .001 for blogging something interesting
Clean up your act, your audience is not High School kids, we don’t have the time to waste that you do.
Please JCD, save us
I remember just recently how both Geithner and Bernanke skirted around the questions of transparency with regards to what banks got what amounts of money and what they did with it. Although they both said these questions would be answered later? What I think the real question should be is if their are independent audits then can this information be obtained by the media and the public? How often are these audits done?
I think with the rising deficits a whole lot of American’s are asking the question “Where is all the money going”? and why don’t we see real results with the amount that has been handed out?
#2–first time===really??? Donate and have never commented and do so to rag on Mr G? Hard to believe, not impossible, just hard to believe.
The Ed’s should check your story out because if true, its heavy duty.
Just a relevant distinction==I think Guilhermes posts are as interesting as any other here. I think his commentary is pretty lame and distracting enough to skip over. Perform that bit of irrelevantectomy, and an excellent blog still remains. Could be even better if you lead by example and post your better thoughts?
Lead by example, not by pissing in the whine.
Ha, much of the history of banking regulation in this country can be grouped into either:
a.) The federal government didn’t like the fact that most banking was chartered and controlled by the states, or
b.) established banks didn’t like competition from newcomers, and so got various barriers to entry put in place for their benefit
Concerning the Federal Reserve, it was created in response to the Bank Panic of 1907 when it was finally determined that there needed to be a lender of last resort (besides good old J.P. Morgan cutting deals with his pals) to help prevent similar, potentially disastrous panics in the future. And not necessarily to be the huge regulatory behemoth it is becoming today. So in that regard, the Fed pumping out hundreds of billions of dollars to prevent banks from going under these past two years is exactly why it exists. And any attempt to compare the Fed of 1929 to the Fed of today is kinda silly.
#5–SL==nice review, thanks.
Also, while it is common to say the Great Depression started in 1929, I think a more precise/longer explanation is that there was a stock market crash in 1929 but that the Great Depression didn’t really get going until 2-3 maybe even 4 years later? All the result of too little intervention by the Feds once the Bank Failures created a credit crunch.
I assume Mr G thinks all his initial items are somehow related to something evil, but I don’t see it. Those dots would have to be connected for me.
All this does is reinforce the fact that we need to either abolish the “Fed” as a Private Bank, or take it over as a Government Entity.
You know…so we are following our own Constitution?
ANd where is this room they are talking in??
WSJ the fed?? where is is??
I see furniture worth THOUSANDS of dollars in there..
The Fed was created in response to the public’s concerns about the Money Trust, which was threatening to ruin the country. Unfortunately, instead of the Federal Reserve Act being written by politicians, it was written by the Money Trust itself when its members all snuck down to on Jekyll Island to form a cartel. What resulted was highly favorable to the bankers and their new position of power enabled them to bring about the Great Depression.
#6, bobbo, true. And even with the resulting contraction in the money supply from the Fed’s failure to deal with massive bank failures, the results were made even worse with some of the early, brain-dead attempts of FDR to stabilize prices and wages, instead of letting them adjust to more appropriate levels. When the amount of money available to buy things goes down, keeping prices artificially high isn’t the first thing you should consider unless you want to take a bad situation and make it worse.
So when taking in the extremely large scope of something like the Great Depression, looking at it as a single event and concluding that having a central bank is bad because it happened is missing the boat entirely; particularly when it wasn’t just limited to our borders.
Of course, depending on how much you buy into Friedman, there is the argument that the Federal Reserve did create the depression because of how it essentially nationalized the role that many private institutions had been built up to fill, and when the central bank takes over and fails to perform, you get something worse than what might have been, had it not taken over in the first place. Counterfactual hypothesizing is fun, but I’m not sure it’s extremely useful in proving anything.
Rather than the evasions, I’m more interested in the video. Great quality and loads as fast as any other. Someone explain please.
This guy had all of the questions before hand, and still… he gets his ass kicked. Unbelievable.
I hate embedded players with no full screen button. Boooooo! Hisssssssss!
effen stupid embedded player. I wanted to repeat a few seconds of something and the damn player freezes.
Too bad the WSJ is such a quality rag. Oh, right, they got that money grubbing asshole in charge now.
Fusion–I just moved my play cursor back and forth on the expanded picture (not full screen) of the embedded player. Worked just fine. I’m using Firefox 3.0. Most current Java Updates.
I like the Digg format. Blogosphere format far exceeding the relevancy of Big Media. Even better would be that follow up question from an informed interviewer–but who would agree to that?
#6, Mr. Bobbo,
Actually, the Federal Reserve contributed more to the Great Depression through ignorance than inaction. At that time the Fed was more of a clearing house for financial transactions. Monetary policy was not a well thought out concept either. It wasn’t until FDR brought in Keynes did Monetary policy actually get any attention.
What is not well talked about was the large depression after Andrew Jackson demolished the Second Bank of the United States because there was no moderating influence for the local banks to lean on. The resulting chaos led to the formation of the Whig Party and eventually to the Republican Party under Lincoln.
It was Lincoln who brought in the next banking step in 1863. He also created the Office of the Controller of Currency to supervise all banks, created a national currency, taxed State Banks using their own currency, and other regulations to ensure safety in banking.
These steps by Lincoln were insufficient to stave off the massive financial crises in the 1870s, 1890s, and early 1900. When times got tough the local banks had no one they could borrow from and so in turn, had to call in loans which only exacerbated the crises. The United States was the only major country without a Central Bank at that time and international trade was increasing.
The Federal Reserve System was created to meet the needs of the local banks and facilitate international trade. It was also tasked with Monetary Policy which was not well understood.
There was a minor crash in late October 1928. The FED increased money supply to the local banks which saved off the crash. There was no or little enforcement of banking regulations. This only encouraged the local banks to lend even more money on speculation and thin margins until the crash on 1929, a year later. (sound similar to last year?)
The Republican Hoover didn’t want to meddle and so allowed the market fix itself. This is where so many neo-cons get the idea that the FED fueled the Depression. By not doing what they were created to do totally screwed the economy.
I/dare I say, we?/don’t understand it.
Two thoughts: 1. Greece suffered economic doldrums from having no banks for some reason, or banks that gave no interest and therefore couldn’t make loans, I don’t remember what, or I’m making this all up–too much ouzo when I heard this story. Then after some revolution, the government instituted “standard banking arrangements” and viola economy took off and I bought 3 flakati rugs.
The other was an SF story about space colonies growing in population. Some guy was running the banking system and the population rioted over the imposition of interest on money loaned. When they confronted the guy he said “Fine==take the bank.” The angry mob decided he should keep the bank and keep charging interest. Forget the final resolution, but the guy had read interstellar history and knew the rabble hated paying interest ((they were all LIEBERTARIANS is seems)) and would revolt. He could fight or finagle.
Oh–thanks Fusion.
Geithner said I have never worked for Goldman Sachs. He was adamant about there being no connection between Goldman Sachs and himself. This is interesting as washington independent states “It doesn’t help that the deal is teeming with connections that are sure to raise questions. [JPMorgan Chase Chief Jamie] Dimon is one of the three class-A directors of the board of the New York Fed, and its head is Stephen Friedman, a former Goldman Sachs chairman, who still sits on the investment bank’s board. The New York Fed’s board also includes Richard Fuld of Lehman Brothers, a firm that is another oft-rumored potential candidate for a bailout. Fuld is a class-B director, meaning that he is elected by member banks, astoundingly, to represent the public. (Friedman is also supposed to be looking out for you: He was “appointed by the board of governors to represent the public.”) Thus Geithner reports to a board that is composed of people who are not only under his purview but would also benefit from any potential bailouts. The structure of the New York Fed’s board bears more than a passing resemblance to that of the New York Stock Exchange in the bad old days, when member firms, regulated by the N.Y.S.E., were heavily represented on its board.” There is more information but I think there are connections from Geithner to Goldman and he has and will continue to help these people who have caused many of the financial crisis including the run up of oil last summer. Tim Geithner is less then perfect and he may be dealing with Goldman Sachs but I am willing to give him more time with the qualification that I am watching closely and I will jump on anything I find which is out of place. I hope one day we can get our government back under control.
Some people trust the present administration and Congress to handle our problems and others consider them the four horsemen of the Apocalypse.
I’m among that last group.
#20, Alphie,
I bet you can’t even make music by rubbing your hind legs together.
Do you really think Jesus would approve that remark?
#23, Alphie the Budding Nazi Statist,
Say what? Jesus wasn’t a man of peace?
We all perceive YOUR wickedness. We are not deceived by your hypocrisy, your hate, your vile evilness.
Jesus didn’t die for the likes of you. He dies so others might live. You don’t want others to live.
Alphie, think about what Jesus would say.
It seems that almost every question was dodged. I still do not understand his unpaid taxes, but I know that there is some sort of financial auditing process that officials undergo. However, what does that have to do with unpaid taxes? Humm, could this be confession of a double standard?
Alphie,
So it looks like you haven’t thought too much about Jesus.
#31, Alphie,
What do you think the chance is of you passing through the eye of a needle?
Think about what Jesus would say.
#33, Alphie,
So have you thought about what Jesus would say yet?
Would he approve of you mocking him?
#35, Alphie,
Have you thought of what Jesus would do? Or say? Or think about your actions?
Alphie,
Again, you quote scripture without fully comprehending what they mean. You pick a few that suit your purposes and ignore the ones you should learn from.
Jesus told his followers that if someone strikes him, “offer up the other cheek so that they might strike that too”. That means you don’t strike back to avenge the attack. That is pacifism, NOT a War God.
Jesus looked at those who only professed their belief; that thought they could buy their way into heaven. He declared that these rich men have as much chance of entering the kingdom of heaven as a camel does passing through the eye of a needle. You can’t grasp the message in that. Instead, you mock Jesus by not only making light of his message but by ignoring it.
Jesus’s message was that entrance into heaven is not automatic. It is earned by the life you live on earth.
Again, think about what Jesus would say if once again he were to walk the earth. Do you really think he would approve of calling someone in favor of health care a “budding Nazi Statist”? Or compare their intellect to a pea on a highway?