About 'dc motors'-What Is a Constant Speed Motor
Job Creating Investment by the for profit sector of the economy is regulated by expectations of risk and reward. That sounds largely psychological in nature and it is in a sense. The Federal Reserve has come to be seen by many as the economic puppet master of the country and even the world economy because it does have such amazing far reaching policy to control interest rates , currency flows and basic access to money. When the economy is down and tax revenues are not going to be going up because business activity is down people come to the immediate conclusion that the Federal Reserve maybe the only game in town to if not fix the problem try something that may or may not work. The same attitude prevails when the the economy is spinning on all cylinders with interest rates going stratospheric and the Federal Reserve is called upon to shut off money supply thinking that somehow they were not responsible for having too much money flowing in the first place. The Federal Reserve was right there when the housing boom was starting to spin out of control with plenty of cheap money and then when it collapsed Alan Greenspan looked clueless when he was intimately involved in making those special variable interest rate mortgages already being serviced move from having been originated at 3 % up to as much as 8% making so called "subprime" mortgage payment unaffordable for millions. Just as the Federal Reserve presided over the banking and stock market crash of 1929 it was there for 2007 to 2009. Everyone nods their head thinking well it probably would be worse had it not been for the Fed. Not everyone is so sure . What grand miscalculation prevented Alan Greenspan from reducing interest rates before the housing market crashed? What inflation fear needed to be quashed at that point in the economic fear cycle? Greenspan and Bernanke and Volcker all get tremendous credit for everything that goes well as if the economic history is written not just by the survivors but by the victors in each cycle. The fact of the mater is that The Crash of 2007 had the Federal Reserve sitting there as puppet master and when Bear Sterns and Lehman became over leveraged they sat there philosophically saying that the policy of no bank too big to fail should be over and that ultimately precipitated on of the biggest world financial panics in history. Bernanke was there and was part of the problem not the solution in taking down Lehman especially. We saw it all unfold on television. The federal reserve gets and F grade for their involvement soon world banking began to shut down because of Federal Reserve Decisions made. LIBOR shut down so interbank loans shut down . The fed got together with the US treasury after they created this panic of panics and created TARP to force banks to take federal capital to restart a paralyzed system. First they shoot the economy in the head and paralyze it and then they try to revive it from the coma! Where was the Fed when all the economy needed was lower interest rates? Yes housing prices were eventually going to have to fall. I knew that long before the housing bubble became news. The federal reserve looks like an evil puppet master the more you see how they react in a panic to their own bad decision making. Some of us actually think that the word "failure" applies to the federal reserve and not just to Alan Greenspan or Bernanke separately or together. After having made the big mistakes they do then suddenly it seem only necessary that the Federal Reserve must have to exercise its greatest powers. Is that like creating a crisis in order just to exercise the power you have? That is sort of like a undertakers from funeral homes going out on the streets and shooting people dead to create business for themselves? Yes that is exactly what the Federal Reserve seems to do on a number of occasions. Yes, once they cause a major banking crisis panic like they did or assisted doing taking down Lehman brothers and Bear Sterns the way they allowed to happen then there was no choice but to engage the services of the Federal Reserve and to go beyond that with TARP and other emergency measures. That would be like not letting the killer undertakers take the bodies off the streets and bury or cremate them. TARP did become necessary although it would not have if they had reduced interest rates more than a year before or left the interest rates low enough that housing could become affordable by other means than having to crash first. Instead of TARP the federal reserve could have opened its window to borrow cheap to free money to the general public instead of just the big banks that were frozen in fear . We know that we now have the computer power to do such things on a small scale with millions of people at the same time. Our entire tax system and banking system is enabled by computer power. Alternatives to the federal reserve being the only game in town now that we have entered a period of slow growth financial malaise and fairly high unemployment are many. Many people are looking to the Fed again for guidance or to create QE3 out of thin air to stimulate the economy. Everyone knows now the Fed has trapped itself in a box with zero to near zero short term interest rates and at the same time offering longer term treasury yields guaranteed safe that are obviously taking money out of circulation and putting it into "reserves" . Since all the money comes from a printing press or a random number identification per bill generator it is clear that money being loaned to the government for interest is not financing the government. The government need only print more money to finance itself under the circumstances. One dollar might go in to reserve as a treasury note and 3 for or 5 maybe more can come back to pay government employees and contractors ad infinitum. The economy has been successful as a world wide economy producing a deflationary environment because we tend to maximize productions with machines that run less on labor than on energy resources including petroleum and hydro-power . world wide competition is going to continue leading to lower prices as productivity increases. It is easy to increase production from a modern factory because you can just turn up the speed that the wheels turn to churn out products or run the factories 24 hours a day and on week ends too. It takes fewer and fewer worker to run more sophisticated computer controlled robot factories.. Leisure time is increasing for the population around the world and most of us agree that is a good thing. That leads to a secondary highly visible service economy including health care as a huge component. Government should not be trying to nationalize health care if it is a major new component of the US economy and a huge part of its future export prospects but it is! The main alternatives to fixing the economy is probably working to get government out of the business of trying to decide what is best for the economy and what is not and that starts by looking at transforming the US tax code that ties our country in knots to the point of becoming a gnus. Alternatives to relying on the Federal Reserve start with getting rid of capital gains taxes because that is freezing money in old antiquated industrial investments across the economy. The Congress, the President , the federal reserve and the academics see that as a future source of government money and see it unthinkable as not being taxable in the future. S&P might actually drop the US debt rating a few more points if capital gains taxes were eliminated . So what? Bill Gates and Warren Buffet would complain that they would no longer be paying any taxes instead of just voluntarily doing so commensurate with their apparent guilt. So What? Reality is there could never be a stimulus to the economy like an elimination of capital gains taxes would be and it would be a long lasting benefit especially if it also applies to foreign investors in the US and their investments owned here. Would the government lose money as a result? Maybe in the short run but not in the long run as economic activity would perk up almost immediately. Converting the complex often punitive income tax system to a flat rate system or a consumption tax with a mark up on prices you never see in the purchase price of everything would raise as much tax or more. Government does not want to give up any of its powers just as the Federal Reserve would just love to go on helping to create the biggest worst financial crises and then look like they are heroic in solving the problems they create in the first place. Lowering taxes can be as much of a stimulus on the economy as anything because it is a major cost to everyone who is in the investment business where risks and rewards are weighed in making decisions. High taxes are friction just as too much regulation is friction. Why invest in employees if you have to pay more than they are worth because of some regulation or having to provide health insurance to them because health insurance is tripled taxed in this country? Why isn't heath care tax free at all levels if it is the center piece of our social contract and a the service economy of the future? It makes no sense. If we want more health care at lower prices we don't want hidden taxes in every good and service involved just to give unrelated government a cut? Why? It is obvious what needs to be done. If we want to punish rich doctors for being rich and punish rich drug companies for making drugs that save lives and could ultimately make health care cheaper we do that. Your church is tax free because we have freedom of religion in this country but your doctor is fully taxable so his or her services cost twice as much as need be so you pay his taxes. It is tax free to go to heaven with your church but you will be taxed to the hilt to have your life here and now saved by your doctor. Does that make any sense at all? No. So why are people saying the only game in town is the federal reserve to get the economy going? That attitude is to allow the government to continue getting a big enough cut to continue growing faster than the rest of the country. Big government only becomes more arrogant and punitive as it get gets bigger and we have a president now that believes in that but also a Federal reserve and a supreme court and congress to a large degree too. Ridding government of money to grow can help cut their punitive nature and make them a little less arrogant but it also moves the power for free economic choice to the people who can take economic capital, not just money ,and work to get the biggest best returns from it and we know for a fact that the government has never created a company like INTEL or Cisco or IBM or General Motors for that mater . Where has government had that kind of fiscal or monitary success ever? When the government built the big hydro electric dams they did pretty well but behind the scenes were private contractors making it all happen all along. Government basked in the glory when companies like Morris Knudsen did the real work . At least the government could make a viable investment now and then! Anyone can and there are a lot more anyone's out there that do than government officials and agencies, The Alternative to the fed maybe less fed power. In the future we may still need a fed to react to a monitary crisis. The fed existed before the great depression just in case you were not aware of that just as Andrew Carnegie's world with out war temple of peace existed before world war 2. Having the government pretend that a wish is their command is nonsense. Never will work until after a crisis causes them to take new unexpected measures that crimp our freedom and liberty as free agent individuals in a free society. I am not one of those people for the elimination of the federal reserve but I can see reason to recall Bernanke because he should be standing up not for government status quo but for cutting taxes and eliminating financial rules and regulations that hamper economic growth starting with eliminating capital gains taxes. There is no reason schools in Portland oregon need to cost $15000 a year per student instead of $4000 a year per student actually enrolled and not just head counted. That is the kind of government fix that is required making sure no one is getting a special cut from the taxes we pay. We know that back in 1947 schools cost a lot less per student and strangely with a faction of the money adjusted for inflation today they got better results back then with larger class sizes, less money paid to staff and teachers. We can cut plenty of waste out of government and not have the government need to borrow so much money as if we are still in need of war bond funding like we were in past times. One of the biggest sources of stimulus money is in treasury note buying by the Chinese and Japanese. We want them to spend that money and put it into circulation in our economy not as a means to buy up our companies but to buy the consumable we manufacture. The federal reserve knows what I do that if we said to the Chinese and Japanese we will give you an extra 5% to cash out your bonds and spend it in the economy any way you like we will have an immediate stimulus. If they don't go for a 5% discount offer a 10 % discount or just call the bonds and give them a extra one percent to settle the inconvenience because the money is just printed and then ultimately it has to be traded or spent somewhere by somebody somewhere in the US economy. That money is water behind the dam waiting to be used in our economy the only place that the dollar is good. Yes the Federal Reserve needs to exist in a real emergency but its is wrong that we have a federal reserve that helped create the conditions where it comes in as the savior. There are immediate viable alternatives to the fed game playing now starting with them offering to sell gold at super high prices right this minute. Imagine the financial stimulus we would see if the fed said it is willing to sell 80 million ounces of gold for $1750 or more an once! It could then buy back all the gold it sells at a lower price in sort order and put money back into economic circulation immediately. They could sell that gold and buy the mines in the us and around the world where there are known reserves ....these are reserves that waste energy taking gold out of solid rock when we already have more gold than anyone can use other than to put in a vault as a currency reserve or ultimately a false hope of it being a store of value at absurd prices we now see considering gold is mined for under $350 from some mines today. The federal reserve needs to be much more creative or it needs to leave the creativity to the American people by cutting government out of the equation. Government is only a predator at the top of the food chain otherwise it would not need to tax anyone to bring in revenues. If the American people want their government in their free society to act like a predator we might as well just give up our constitution and repeat the horrors of the roman imperial empire. The bigger the predator the more taxes collected the better the government. Kind of brings Adolf Hitler , Stalin , Mao and Nero to mind doesn't it? Why is it our govenrment puts govenrment first before our people given anyother alternative? Self perservation? I thought that the US govenernment was OUR government for and by the people not for the concept of a power state or a separate estate. |
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