The Last 95 Years Without the FedSubmitted by willy6281 on Fri, 11/14/2008 - 16:30
Long time reader, first time poster here....
There was a time about a year ago when I could come look at the Daily Paul everyday after work and spend hours learning from all of you. It seems now that all the basic information about how our current economy and monetary system currently is and what we think it should be has been put out there.
I have a finance degree with an economics minor and it's not too much of a chore for me to understand how our economy, fiat currency, fractional reserve banking etc. operates. What really bugs me is that I didn't see it before. When I go back and read my old college textbooks it's all right there but with a slight twist that kept me from raising any questions about whether it was right or wrong. However, my friends and family will not even flinch when shown this information.
I want to paint a picture for them showing them what the last 95 years would have been like without the intervention of the Fed.
-Instead of a handful of large multinational corporations in each industry there would be large numbers of smaller companies competing fairly for quality labor and market share by paying higher wages producing better products and actually engaging in customer service as opposed to outsourcing to people who can't even communicate with me because they can barely speak my language.
The larger companies are the ones who best achieves these goals. What does this have to do with the Fed? Well, in order to create a large multinational corporation today, you borrow cheap credit to buy out your competition and since your the only game in town now you don't have to focus on quality products and customer service and you can cut costs even further since you no longer have to compete for talent in the supply of labor.
-Capital for future economic growth depends solely on savings. Today thanks to the fed capital seems to appear out of nowhere even with a negative savings rate. Magic or funny money? (Speaking of economic growth, of the last few quarters where there was GDP growth does anyone know how much of that growth can be attributed to increased government spending?)
-Not sure if this would go over well but I'd like to believe that because of my first point and hopefully a more informed labor force, the lowest paid full time wage (not jobs specifically targeted to teens and students) for the lowest skilled job that any competent person in the labor supply could perform would be enough to cover the minimum standard of living (housing+transportation+discretionary+savings). Apply supply and demand to the labor supply and a person can increase his income and wealth by obtaining skills and education that sets him or her apart from the rest of the labor supply and puts him or her at a higher demand. All this without government intervention. The only thing I agree on with AFL-CIO is that no one working forty hours a week 52 weeks a year should be poor.
Please give me some more ideas and feel free to correct me if I am wrong on any of this. I might be educated but I went to State school and we all know what government education is like. My second point might even be over the heads of some friends and family of mine. I am alone in this fight over here on my end. Thank you.