Arnold Kling  

A Surprise OWSer

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I write,

Are the Fed's actions in the interest of the 99 percent of us who do not own many shares of European banks?

Overall, my comments stressed style over substance. This was for the NYT Room for Debate feature. Mark Thoma, Dean Baker, and Edward Harrison also participated.

COMMENTS (5 to date)
Bob Murphy writes:

Fight the power, Dr. Kling.

Matthew C. writes:

Very good and pointed questions, Arnold.

Æternitatis writes:

A funny question and well put, but is the premise true? A rational investor (and they are certainly more than 1%) quite likely owns a globally diversified portfolio of equities (usually through mutual funds and ETFs) which probably include a non-trivial weight of European financial entities.

mark writes:

I guess I don't fully get it. That is one of the main purposes of the Fed - to keep the banking system afloat. How they do it is a subsidiary issue. Maybe your point is, the Fed should not exist at all, or its purposes should be smaller; perhaps, I glean, it should just print a certain amount of money and let the free market disperse it. Which seems a different issue. And for a different time. The idea of kicking out the props under the economy while you're in a recession seems unwise.

Becky Hargrove writes:

This is no time to become passive aggressive and say "let the bridges burn as they may". As you said, "No government has brought its budget under control. No political impasse has been broken. No bank has become better capitalized. No wages within the euro zone have adjusted to address their misalignment."

And why have these things not happened?! Why have the left and the right not come together to find common ground and solutions while there is still time - not to mention more than ample technology to do so? We know what the problem is the world over -- overly restricted markets that do not allow better productivity to happen. We cannot just assume that letting the old world fall away is going to somehow allow a better one to materialize. Let's do something about this together while we still can.

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