For once, he has not said anything I find objectionable. I only read this column once, and I had a Guinness for St. Patrick’s Day, but he makes sense.
Banks need to be held accountable for hurting people. It is one thing to knowingly enter a loan you can’t pay–and even there, the bank should not make the loan if this is the case. It is another entirely to willfully mislead people.
Once you truly grasp how the fractional reserve system works, particularly as it combines with central banking, you just want to tell many of these banks to shut up and fly right. Not many of us can imagine million dollar bonuses, but they are not uncommon, I don’t think, in the banking world.
If Krugman wants to attack our banking system as parasitical, I would be prepared to support him, at least up to a point.
The “rich” are not the enemy. Bill Gates, for example, earned his money. He has created some ten thousand millionaires-something on that order–and ten’s of thousands of well paying jobs. This is a useful activity.
What is not useful is creating money from scratch. All banks do this. Money that should be in the proverbial vault is instead cloned and given to other people. This is money that would not be in the economy otherwise, and is thus intrinsically inflationary.
Moreover, this Quantitative Easing the Fed is doing is nothing but printing money and giving it to a small elite that is already very, very, very rich, so they can lay ownership claims on more of the world’s property. Yes, we lose the purchasing value of our money through inflation, but only if that money is spent HERE. What I expect to happen, now, is that a lot of $600 Billion or whatever it is–how would we know, when we can’t audit the Fed?–will be spent buying up Japan. That won’t cause inflation here, but it WILL cause a net transfer of wealth from Japan to here.
I won’t defend this. This is not a matter of patriotism. Theft by any of us is the responsibility of all of us, and theft is what this is.
We need to end the Fed, and end fractional reserve banking. The latter idea makes peoples heads want to explode, but in my view it is quite doable. I will link my series again: http://www.goodnessmovement.com/Page14.html
I have said this often, but what I propose is fully congruent with the spirit in which Marxists approach economic matters, except that I care about getting the damn thing right. There are fundamental inequities n our system, but they will not be fixed by “revolution”, or the empowerment of an unaccountable elite. On the contrary, such an outcome would likely work to the BENEFIT of those who already hold most of the wealth and power in this nation.