Re: Re: Re: Re: Re: Current (heterodox)thinkingoninterestrates?

[Jim Devine <jdevine@xxxxxxxxxxxxxxx>]

> >CB: From whom do they [banks] borrow ? Aren't the biggest creditors, net
> creditors ?

I wrote:
> they borrow from all people who have bank accounts, though the most
> important are those who can afford to save most and also can afford to keep
> the largest amounts in the bank.

CB responds:
> CB: Is Chase Manhattan a net debtor to its bank account holders ? How many
> people is that ?  How about Morgan Guaranty or progeny ? What is the money
> trail here ?

I think it's a mistake to emphasize the role of specific companies or
individuals so much. It's important to remember that there are markets are
at work here and that markets can work independently of the will of any
individual or company. But there are lots of problems with markets even
when individual manipulation and monopoly play no role.

> >CB: Stagflation seemed to be a pinnicle of monopoly price fixing

I wrote:
> currently, we're having the opposite of stagflation, i.e., low official
> unemployment rates and low inflation.

> CB: And we don't have deflation. Everything is just perfect.

no, it's just that issues of inflation and unemployment are far from the
sum total of the measure of what can be wrong with this society (both
domestically and internationally). In addition to the stuff I talk about in
my "Three Bears" screed and stuff people on pen-l discuss every day,
increased inequality seems an obvious issue that one misses if one focuses
totally on issue of stagflation, etc. But I think that to really understand
the current "disinflation" (falling inflation and unemployment), you have
to look at the increase in inequality. The victory in the "war against
inflation" is intimately tied to the capitalist victory against workers in
the 1980s and the increases in inequality within the working class, which
are linked to the increased insecurity of workers.

<ellipsis>

> There is never anymore deflation, lowering of prices as a general trend.
> This seems an evidence of institutionalization of a monopoly price fixing.

actually, it's _good_ that we don't have deflation, since it encourages
mass bankruptcies among debtors (i.e., us).

Jim Devine jdevine@xxxxxxx &  http://liberalarts.lmu.edu/~jdevine