The General Economics Thread

Good thing our central bank isn't answerable to the legislature then.

Unless the Republicans get control of government. Then you had better believe they'll take control over the Fed, as well as all other "independent" agencies.

Their billionaire masters wont let them do anything that stupid.

They'd take control to favor the billionaires though. An overnight spike in interest rates.

That's the thing, they'd immediately cut as much fiscal support to the economy as they could get away with, and the Very Serious Person terror of the looming inflation crisis would drive them to raise rates quickly and devastatingly. We'd be in a new recession before the first year of the administration had ended.

How, exactly? Even the President has no ability to tell the Fed what to do, and the commissioners' appointments are staggered so that no one term of Presidency can appoint a majority.

edited 24th Sep '14 4:35:50 PM by Ramidel

As far as I know, the operation of the Fed is set by statute, not by the Constitution. Congress passes a law changing that, the President signs it, voila.

I don't share your faith that the entire Republican contingent of the House and Senate will be able to get behind something like that even if they get complete control.

That's the problem with a Republican government. Suddenly, they're forced to govern, and people like Boehner have to actually decide whether they're going to put up with the Tea Party's insanity instead of just joining the chorus while nothing gets done, and it only takes a couple to spike the whole thing.

I certainly hope that they would not. I'd rather not have to find out.

It would almost be worth it...

Over here:

Tesco:

• UK accounting watchdog to study Tesco book-keeping probe
  • Tesco bosses could face MPs over accounting scandal - BBC radio
• Tesco admits finance boss Laurie McIlwee left in April - before £250m profit black hole appeared

Other News:

• Motor insurance shake-up drives mixed reviews
• Virgin's Richard Branson offers staff unlimited holiday
• Monarch staff agree to pay cuts of up to 30% — to save the airline.
• Air France offers to scrap low-cost Transavia expansion plan — in order to end a strike.

Looks like retailers may just ignore the American Thanksgiving holiday this year due to the possibility for record sales.

When I hear stuff like that, I'm so happy that Canadian Thanksgiving is in October. We still have Black Friday, but since the day before is just a normal working day, the sales are actually expanded the other way, to cover the weekend.

And since Canadian Thanksgiving is on a Monday, Black Friday type sales don't really work.

edited 25th Sep '14 7:37:25 AM by Zendervai

Unsurprisingly, there's no Thanksgiving here, Full Stop.

edited 25th Sep '14 7:56:07 AM by Greenmantle

What do you think of the Nordic Model?

Of what? The socio-economic structure, or the approach to human trafficking? Both come up in a Google search under the same name.

Unwitting humans assist lizard invasions across the Caribbean

Krugman argues that conditions in the 90s made 2 percent inflation the only respectable number for inflation in VSP circles, despite findings and experience later on proving otherwise.

The Nordic socio-economic model. Norway, Sweden, Denmark largely seem pretty happy, though I hear they have a few problems: racism is bubbling beneath the surface, and many Swedes leave their country to find business elsewhere (sure, Sweden gave us Ikea, Candy Crush Saga, Battlefield and Payday, but apparently many Swedes find their country's business taxes to be too much).

Moving to seek lower taxation is one of those things that's only possible in a world where taxes are dramatically lower in some places than in others. The European model overall seems to be one of high business tax rates (relative to the U.S., anyway), so I wonder where they're going.

They also move for business costs in general. Which is part of why China is so popular (or was).

That assumes that you're able to minimize the loss of output and other similar factors, but offshoring business to poorer nations is a thing that's been happening all over the world.

And the reverse is now happening too. Like many things, it works in a cycle.

Peter Theil from the Financial Times argues people should be less afraid of robots, that robots are only ideal when used in tandem with people, using an example of Paypal and Credit Card Fraud for why robots can't be used alone.

Working on Wall Street discourages speaking out against your own co-workers' corruption.

The German Economy is actually a paper tiger. It looks strong, but it's going to run into an export crisis with a weakening Southern Europe and slowing China. As well, Germany's surplus of 197 billion Euros is actually a sign the economy there is weak since it's wages are far too stagnant, its service sector is weak, and start-ups end up malaising or being stunted. As well, the country's banks have loaned poorly, leading to inflated asset price bubbles prior to 2008.

This is going to end with the carpet being pulled out from under Germany, I suspect.

Matthew Yglesias is concerned about the return of subprime loans, but this time, it's coming not from the housing industry, but the auto industry.

edited 27th Sep '14 1:59:40 AM by PotatoesRock

The looming German crisis has been warned about for a long time. They haven't even come close to listening to the warnings.