That's not much help, Foyle.

>>A few weeks back New Economic Perspectives posted the three blogs listed below. They are first rate comments by an amateur economist...<<

For a start, they are not "three blogs", just one individual's theory, spread over three entries.

What is it about this theory that appeals to you, and why do you find it attractive? It is not reasonable to expect anyone on this thread to first read through the ideas expressed, then to dissect them here.

There are, I suspect, many reasons why the writer of the blog remains an amateur. One sentence, for example, stuck out like the proverbial canine genitalia:

"...in capitalist economies, valuable things and valued services are produced by the private sector. There are a few exceptions – public utilities, subway trains, etc. But as a rule, and in the vast majority of actual cases, useful and valuable *stuff* exists because the labor of workers has added value to already-valuable physical and natural resources."

Errrm... I wonder whether the author gave more than a passing thought to the impact on the economy of healthcare, which in the US already soaks up around 18% of GDP.

http://www.bloomberg.com/news/2012-06-13/health-care-spending-to-reach-20-of-u-s-economy-by-2021.html

He did give at one point an oblique reference to "artificially created monopolies like health insurance", which is more of a political statement than a sober evaluation of a complex topic. But to ignore totally the desirability of giving capitalism unfettered access to the health industry is to exhibit a willful blindness to social reality.

But that's all one can expect from amateurs, I guess.

Not every professional gets it right, of course. The GWS AFL Club, for example, is a highly professional outfit, with a salary cap north of nine million dollars, but they have yet to register a single win this season. Nevertheless, I doubt if any of the amateur spectators barracking from the terraces would make a significant dent in that record, if they were to take to the oval. Another way of saying, being an amateur doesn't make you a genius, even though you may be surrounded by dunderhead professionals.

The full version of my article is here:

http://sukritsabhlok.weebly.com/2/post/2013/05/the-rule-of-men-in-monetary-policy-lessons-from-australia.html

Foyle

“The author ignores the role that the electors confer on the Federal Government, that is, to manage the economy on their behalf.”

You ignore that that statement is pure fiction.

Only after you have refuted all the arguments in this article point by point can you maintain such blatant propaganda:
http://economics.org.au/2010/08/unrepresentative-government/

“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.”

You’re contradicting yourself.

How could a central authority adjust “the levers” of the economic situation, without “assisting specific legal entities and picking winners or favourites”?

“Banking tends to be a monopolistic case and therefore deserves to be a strongly regulated, even nationalised, activity.”

In saying so,
1. what account of have you taken of government actively causing or exacerbating such monopolistic tendencies?
2. what account have you taken of the fact that government is itself a monopoly? Why don’t all the arguments against *potential* monopolies apply even moreso against government, since it is an *actual* monopoly of force?
3. you assert that government knows how to perform the essential purpose of financial markets. If this were true, then
a) why wouldn’t it be true of all markets?
b) why not abolish private property?

Rhostry

“Completely concur with Foyle.”
Then please answer the same questions?

”Clearly, we and the world need to invent and accept a far more sustainable model, that simply disregards current economic modelling and mantras.”

Aren’t you going to need economic theory to do that? And haven’t you just said that none of them make sense?

“Which cannot ever be accomplished, if we simply reject new ideas out of hand…”

All the so-called “models” of so-called “sustainability” are not “new ideas” – they’re just the same old same old idea of unlimited arbitrary government power controlling anything and everything.

“…or their logical basis.”

The idea that government is capable of promoting sustainability *completely lacks* a logical basis: see http://forum.onlineopinion.com.au/thread.asp?discussion=5753&page=0

Private banks should not be allowed to create from nothing the money to equal increases in our productivity + inflation.This means that a few private elites can own the creativity and hard work of the very masses whom they falsely proport to represent.

When even our inflationary money gets created as debt,total enslavement by a few elites is the inevitable result.

Currently in OZ we have 3% growth + 3% inflation.Our private banking system creates both as debt.The debt can never be repaid because imputs in terms of loans will always be greater than debt + inflationary debt in terms of outputs.This is a mathematical reality that people like Pericles cannot address.

Suck it up long and hard Pericles since you and your ilk are economic dinosaurs.

JkJ. We elect the Govt, that Govt then makes decisions in our name. From my reading, this is what Foyle was saying.
As I read him, he also seems to think that we should never ever believe banks are too big to fail, nor should failing banks be propped up with Govt money.
Or, that we shouldn't socialize private debt, without also socializing subsequent profits!?
If Govt money is to be risked, said banks should be nationalised first, by buying up bargain basement shares, for a fraction of what they might command, if propped up with Govt money!
And we do need to adopt very different economic models, given the flawed ones we rely on now, have placed us where we are now; and created both the Great Depression and the GFC.
And the ever widening gap between the haves and have nots.
This is counter intuitive, given narrowing that gap, would increase the discretionary spending power of the masses, which in turn would increase general economic activity!
Which by the way, seems to be the central argument Tony Abbott is relying on, to support his version of paid maternity leave?
I concur with Foyle's post, inasmuch as most of what he seems to be saying, resonates with what I believe to be correct.
The test of true intelligence, is the ability to hold two countervailing views in mind, and give equal weight to both.
I think its called, keeping an open mind.
Rhrosty.

Rhostry
“We elect the Govt, that Govt then makes decisions in our name. From my reading, this is what Foyle was saying.”

What he said was that the electors confer power on the government to manage the economy on their behalf.

Certainly the government claims to make decisions in society’s name. The point is however, that the electoral system provides no evidence whatosever that any given act of government in fact represents the majority of electors, let alone society.

“As I read him, he also seems to think that we should never ever believe banks are too big to fail”,

I agree we shouldn’t. I don’t know that’s what Foyle is saying.

“nor should failing banks be propped up with Govt money.”

Agreed. But I think you’ll find Foyle is in favour of propping up failing banks with government money. Foyle?

“Or, that we shouldn't socialize private debt, without also socializing subsequent profits!?”

(When you say “we”, you mean the State. The State is not “us”.) The State shouldn’t socialize private debt. If it’s doing so, the remedy is to stop doing it, not to socialize something else as well.

I think you’ll find Foyle is in favour of socializing private debt, because fractional reserve banking intrinsically does so. Foyle?

“If Govt money is to be risked…”

Government money shouldn’t be risked on banks in the first place. It assumes governments know how to perform the function of financial markets without consulting profit and loss. Both Foyle and you have evaded answering how it can do that.

“ said banks should be nationalised first, by buying up bargain basement shares, for a fraction of what they might command, if propped up with Govt money!”

Well we’re agreed government money has a corrupting influence on banking!