Best of the Week
Most Popular
1. Market Decline Will Lead To Pension Collapse, USD Devaluation, And NWO - Raymond_Matison
2.Uber’s Nightmare Has Just Started - Stephen_McBride
3.Stock Market Crash Black Swan Event Set Up Sept 12th? - Brad_Gudgeon
4.GDow Stock Market Trend Forecast Update - Nadeem_Walayat
5.Gold Significant Correction Has Started - Clive_Maund
6.British Pound GBP vs Brexit Chaos Timeline - Nadeem_Walayat
7.Cameco Crash, Uranium Sector Won’t Catch a break - Richard_Mills
8.Recession 2020 Forecast : The New Risks & New Profits Of A Grand Experiment - Dan_Amerman
9.Gold When Global Insanity Prevails - Michael Ballanger
10.UK General Election Forecast 2019 - Betting Market Odds - Nadeem_Walayat
Last 7 days
This Invisible Tech Stock Threatens Amazon with 800,000+ Online Stores - 21st Nov 19
Crude Oil Price Begins To Move Lower - 21st Nov 19
Cracks Spread in the Precious Metals Bullion Banks’ Price Management System - 21st Nov 19
Why Record-High Stock Prices Mean You Should Buy More - 20th Nov 19
This Invisible Company Powers Almost the Entire Finance Industry - 20th Nov 19
Zig-Zagging Gold Is Not Necessarily Bearish Gold - 20th Nov 19
Legal Status of Cannabis Seeds in the UK - 20th Nov 19
The Next Gold Rush Could Be About To Happen Here - 20th Nov 19
China's Grand Plan to Take Over the World - 19th Nov 19
Interest Rates Heading Zero or Negative to Prop Up Debt Bubble - 19th Nov 19
Plethora of Potential Financial Crisis Triggers - 19th Nov 19
Trade News Still Relevant? - 19th Nov 19
Comments on Catena Media Q3 Report 2019 - 19th Nov 19
Venezuela’s Hyperinflation Drags On For A Near Record—36 Months - 18th Nov 19
Intellectual Property as the New Guild System - 18th Nov 19
Gold Mining Stocks Q3’ 2019 Fundamentals - 18th Nov 19
The Best Way To Play The Coming Gold Boom - 18th Nov 19
What ECB’s Tiering Means for Gold - 17th Nov 19
DOJ Asked to Examine New Systemic Risk in Gold & Silver Markets - 17th Nov 19
Dow Jones Stock Market Cycle Update and are we there yet? - 17th Nov 19
When the Crude Oil Price Collapses Below $40 What Happens? PART III - 17th Nov 19
If History Repeats, Gold is Headed to $8,000 - 17th Nov 19
All You Need To Know About Cryptocurrency - 17th Nov 19
What happens To The Global Economy If Oil Collapses Below $40 – Part II - 15th Nov 19
America’s Exceptionalism’s Non-intervention Slide to Conquest, Empire - and Socialism - 15th Nov 19
Five Gold Charts to Contemplate as We Prepare for the New Year - 15th Nov 19
Best Gaming CPU Nov 2019 - Budget, Mid and High End PC System Processors - 15th Nov 19
Lend Money Without A Credit Check — Is That Possible? - 15th Nov 19
Gold and Silver Capitulation Time - 14th Nov 19
The Case for a Silver Price Rally - 14th Nov 19
What Happens To The Global Economy If the Oil Price Collapses Below $40 - 14th Nov 19
7 days of Free FX + Crypto Forecasts -- Join in - 14th Nov 19
How to Use Price Cycles and Profit as a Swing Trader – SPX, Bonds, Gold, Nat Gas - 13th Nov 19
Morrisons Throwing Thousands of Bonus More Points at Big Spend Shoppers - JACKPOT! - 13th Nov 19
What to Do NOW in Case of a Future Banking System Breakdown - 13th Nov 19
Why China is likely to remain the ‘world’s factory’ for some time to come - 13th Nov 19
Gold Price Breaks Down, Waving Good-bye to the 2019 Rally - 12th Nov 19
Fed Can't See the Bubbles Through the Lather - 12th Nov 19
Double 11 Record Sales Signal Strength of Chinese Consumption - 12th Nov 19
Welcome to the Zombie-land Of Oil, Gold and Stocks Investing – Part II - 12th Nov 19
Gold Retest Coming - 12th Nov 19
New Evidence Futures Markets Are Built for Manipulation - 12th Nov 19
Next 5 Year Future Proof Gaming PC Build Spec November 2019 - Ryzen 9 3900x, RTX 2080Ti... - 12th Nov 19

Market Oracle FREE Newsletter

$4 Billion Golden Oppoerunity

The Best Way to Ignite the U.S. Economy

Economics / Economic Stimulus Aug 13, 2013 - 11:21 AM GMT

By: Money_Morning

Economics

Shah Gilani writes: The problem with the U.S. government's stimulus efforts to create jobs, and the Federal Reserve's quantitative easing to foster full employment, is that banks are the only direct beneficiaries.

There's just no good pool of jobs being formed from the trickle-down effect that first bathes bankers in bonuses, and then showers shareholders with buybacks and dividends.


There is a better way.

And, in spite of the details which additionally involve two necessary but minor structural changes that can be accomplished with the stroke of a pen, there are only two primary steps we need to take to create good-paying, long-term jobs and crank up economic growth.

Step 1 to Growth and Better Jobs

First, the two minor structural changes, which aren't minor if you're a fat-cat banker or crony capitalist, are:

1.) Eliminate the Federal Reserve's ridiculous "dual mandate"

2.) Enact the 21st Century Glass-Steagall Act and simultaneously break up all the too-big-to-fail banks that would still dominate the landscape after separating commercial banking institutions from investment banking shops.

[Please listen to my interview last week with Senator Angus King, a co-sponsor of the 21st Century Glass-Steagall Act, along with his cohorts, Senators Elizabeth Warren and John McCain. You can listen here.]

The Fed's dual mandate is to maintain "stable prices and moderate long-term interest rates," as well as to "promote effectively the goals of maximum employment." It was bequeathed to them in 1977 by Congress and a president and his administration who couldn't manage the country's downward economic spiral.

Besides the disturbing abrogation of Congress' constitutional duties, tasking the Trojan Horse Fed and its belly full of soldier bankers with being a receptacle for the government's outpouring of debt, and simultaneously tasking it with managing GDP growth to engender trickle-down (from the banking fountainhead) jobs growth is a testament to how government emasculated itself.

All this became possible and desirable for our government when the Fed showed its prostituting backers their secret playbook.

By rigging the yield curve to slope steeply upward the Fed manufactures profits for its constituent banks. As long as the interbank lending market is fluid and short-term borrowing rates low, banks can finance buying government issues (which no matter how low their yields, offer a positive carry and good return) as well as mortgage-backed securities. And the Fed can take in worthless collateral (in times of need) to keep banks afloat when they're insolvent and let banks run full-out flush at all other times.

That's the program. Benefit the banks to benefit the economy, which will foster job creation.

It starts with the banks and ends with the banks. That's the problem. Banks and financial services have become too big a component of GDP and too powerful. They are the tail wagging the dog, which is what our economy has become.

We need to do away with the Fed's dual mandate and break up the banks to make them serve free-market capitalism the food it needs to grow -- namely capital. Banks should be reconstituted as utilities providing power to the economic grid, as opposed to being the owners and lever-pullers manipulating the grid.

That's primary goal number one.

Step 2 to Fixing the Economy

Primary goal number two is getting the president and Congress to create stimulus programs to directly impact jobs growth in the five legs of the economy that will serve the whole country's growth dynamic.

The programs have to include both direct support mechanisms and tax-advantaged "incentivization."

The five legs are:

  1. Revamp education and training by: modernizing delivery methods, lowering costs, radically reconstituting student loan programs, and expanding and making access easier;
  2. Rebuild, revitalize and expand America's infrastructure;
  3. Make America energy independent;
  4. Protect and promote America's "knowledge intensive" industries: technology, defense systems, complex machinery, autos and airliners, medical devices, medicine, and environmental safety applications and green technology;
  5. Safeguard and manifest the myriad opportunities in big-data analytics.

A two-pronged approach to fostering solid, sustainable long-term economic growth is easily achievable.

If we first unclog the free-market by flushing manipulative banks and a regime-fostering Federal Reserve's dual mandate power down the drain, and simultaneously get government to serve the people by directing our tax dollars into straightforward, transparent, privately managed programs that create good-paying, long-term jobs and career opportunities in areas that address our 21st century needs, we can rebuild America.

This is America's destiny. Now, all we need is an honest Congress and a hard-working president to invigorate our capitalist backbone and not enslave us in a socialist sinkhole.

Source :http://moneymorning.com/2013/08/13/the-best-way-to-ignite-the-economy/

Money Morning/The Money Map Report

©2013 Monument Street Publishing. All Rights Reserved. Protected by copyright laws of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), of content from this website, in whole or in part, is strictly prohibited without the express written permission of Monument Street Publishing. 105 West Monument Street, Baltimore MD 21201, Email: customerservice@moneymorning.com

Disclaimer: Nothing published by Money Morning should be considered personalized investment advice. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investent advice. We expressly forbid our writers from having a financial interest in any security recommended to our readers. All of our employees and agents must wait 24 hours after on-line publication, or after the mailing of printed-only publication prior to following an initial recommendation. Any investments recommended by Money Morning should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company.

Money Morning Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules