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The Forum > Article Comments > The rule of law – or the rule of central bankers? > Comments

The rule of law – or the rule of central bankers? : Comments

By Sukrit Sabhlok, published 13/5/2013

Perhaps it is time, however, to ask whether the Reserve Bank – like the Fed – could do better when it comes to acting consistently with the rule of law.

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It matters not of whom it is said, the expression "leading monetary economist" is self evidently an oxymoron.

Even if you have a large group of economists – in order to even out the different points of view – you will never obtain a consensus of any use. For example, the Treasury. Lots of economists. Have they ever been correct?

If they can't be, what function do they serve?

Do they even have a collective noun? A guess of economists… a deficit.

As for the rest of the article the title seems strangely misleading… If only because there is no case made for the RBA acting outside the rule of law.

Though apparently the rule the author prefers is that of Bagehot's thumb – if not his dictum.
Posted by WmTrevor, Monday, 13 May 2013 9:14:50 AM
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Since 1913 The US Federal Reserve,a private group of Central Bankers have created most of the money for the US Govt to function.Thus today 100 yrs later they have Western Govts around the planet in their back pockets.

This private group of elites have large share holdings in all the major oil,military,chemical,pharma,resource,media and other financial institutions around the planet.They almost have total control of our Govts and industries.

So welcome to the 21st Century of modern serdom.
Posted by Arjay, Monday, 13 May 2013 9:48:36 AM
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The author ignores the role that the electors confer on the Federal Government, that is, to manage the economy on their behalf.

Limited liability companies are only possible due to legislation and regulation. But the CEOs and boards all think that regulations are burdensome or unnecessary.

A Reserve Bank deciding to assist specific legal entities is picking winners and or favourites; the first is difficult and discriminatory, the second is corrupt.

Far better a central authority adjusting what Paul Keating called "the levers" of the economic situation than some other alternative.

Banking tends to be a monopolistic case and therefore deserves to be a strongly regulated, even nationalised, activity. In September 2008, the Labor Government rescued the banks by guaranteeing the investors funds. It may have been better to have bought them out for a fraction of the share price valuation.

The fact that the sharemarket now values the Which Bank at about ten times the price received on privatisation confirms the monopoly position the banks enjoy in an "industry" that does not fit any description of a productive enterprise.
Posted by Foyle, Monday, 13 May 2013 9:57:41 AM
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Completely concur with Foyle.
Had the Irish or the Spanish gone down the Bank nationalisation road, their respective economies may not have tanked.
I think we would have been better served if our largesse had been supported by shares worth a similar value, and held in trust for us, until the banks recovered or fell?
As it seems to have turned out, all of the big four now seem to be largely owned by the same group of four large foreign investors/hedge funds.
And then we wonder, why there seems to be a history of collusion, or lack of genuinely robust competition among the big four?
Rhrosty.
Posted by Rhrosty, Monday, 13 May 2013 11:26:24 AM
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Put ten economists in the same room and you'll come up with thirty different opinions?
A thirty year study conducted by an ivy league uni, followed 300 economists over a period of 30 years.
The study resulted in the following conclusions?
That economists as predictors of economic outcomes, did no better than a dart throwing monkey!
That those averages grew worse with their public reps or notoriety, with the best known performing the very worst?
Currently, all economic growth and the growth model is entirely predicated on population growth.
In an already overpopulated planet, it is simply not sustainable.
Australia is a very large land mass, but only the narrow green fringe will support sustainable populations, with climate change putting increasing downward pressure on those limitations.
Clearly, we and the world need to invent and accept a far more sustainable model, that simply disregards current economic modelling and mantras.
If management teaches just one thing, it teaches that there is always/always a better way to do things, and indeed, manage and grow an economy.
However, doing what you've always done gets you what you've always got; meaning, we do need to find and adopt a new way.
Which cannot ever be accomplished, if we simply reject new ideas out of hand, or on the basis of misinformation or quite blatant misunderstanding of different concepts, or their logical basis.
Rhrosty.
Posted by Rhrosty, Monday, 13 May 2013 11:49:38 AM
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A few weeks back New Economic Perspectives posted the three blogs listed below. They are first rate comments by an amateur economist on the economic situations that have developed since Nixon took the USA, and consequently the world, off the gold standard in 1971.

I read the blogs at the time and saved the addresses together with the last few paragraphs of the first blog. They are all worth reading.

Few economic articles published on OLO make as much sense or present such well reasoned arguments, even those presented by professional economists.

As John Ralston Saul wrote;
"Many professional commentators and senior administrators in charge of economic questions tend to wrestle what is happening into their own terminology. Thus China and India are presented as success stories of Globalization, when their situations actually represent a quite different theory of how the world works.

Economists who have tied their careers to the Globalist truth are quite protected from reality by their tendency to talk mainly to each other and to do so in bullet- proof dialects that force what is happening in the world through their narrow methods of analysis. And so they remain convinced that it is all a matter of definitions or technical adjustments or the freeing-up of those markets."
(from "The Collapse of Globalism," " subtitled "And the Reinvention of the World'' Ch. 27 second page)

http://neweconomicperspectives.org/2013/04/modern-monetary-theory-overview-part-1.html#more-5233
http://neweconomicperspectives.org/2013/04/modern-monetary-theory-overview-part-2.html#more-5235
http://neweconomicperspectives.org/2013/04/modern-monetary-theory-overview-part-3.html#more-5238
Posted by Foyle, Monday, 13 May 2013 3:43:07 PM
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