I quoted Farrell: > > 3. Write-offs > > > > Expose Wall Street's shadow-banking system. They're playing with $300 > > trillion in derivatives and still hiding over $100 billion of toxic > > off-balance sheet asset-backed securities, plus another $300 billion > > hidden worldwide. A lack of transparency is killing our international > > credibility. Write it all off, now!
me: > > [again, purge, purge! Let's be the capitalist Stalin, purging them all! > > > > [I don't see how this is the result of a recession, however.] raghu wrote: > Farrel's suggestions for the financial sector are not so bad. > > The author is not suggesting Wall Street writeoffs will be a result of > recession. In this case, recession may be the result of allowing the > financial class to fail. Wouldn't it be a good thing for the working class > as a whole in the longer term to break the power of the financiers? it's only good if the working class becomes more organized, because the financiers would likely recover over the years. > > 9. Inflation > > > > Expose the "core inflation" farce Washington uses to sugarcoat reality. me: > > [This is total crap. He's saying that "Washington" under-measures > > inflation, using the core inflation rate (which leaves out energy & > > food inflation). But it's only fools like Farrell who read it this > > way. > > > > [Instead, the core inflation rate is an effort to get a handle on what > > part of inflation is persistent rather than being a flash in the pan. > > He may be right that inflation is under-measured (given the Boskin > > commission changes), but a recession wouldn't expose anything about > > that. It's just Farrell's hobby horse.] raghu: > There are real problems with the (core) inflation measures. According to > this measure wage increases are inflationary but a stock market bubble > counts as growth not inflation. strictly speaking, a stock market bubble has no effect at all on the CPI or the PCE and thus has no effect at all on the inflation rate or the core inflation rate. Stock prices are not directly connected with the prices of consumer goods, which is what are measured by the CPI and PCE. strictly speaking, a wage increase does not show up in the CPI or the PCE unless employers pass the increased wage on to consumers by raising prices. If the latter is true, workers should care, since it indicates a big element of futility in the wage struggle -- and the need to get beyond a mere struggle for higher wages (Gompers' "more"). > Isn't there a problem with setting monetary > policy on this basis? I think the Fed cares about wage inflation independently of the CPI or PCE. If workers stick their heads up, the Fed will stomp on them (all else constant). > I agree with most of your other comments but I think it is very important to > decouple the interests of the working class from the financier class. yes, but there's more than one way to do so. -- Jim Devine / "Segui il tuo corso, e lascia dir le genti." (Go your own way and let people talk.) -- Karl, paraphrasing Dante.
