On Sep 29, 2008, at 9:52 PM, John Thornton wrote:
> Doug Henwood wrote:
>>
>> On Sep 29, 2008, at 6:09 PM, Shane Mage wrote:
>>
>>> Revolutionary socialists have always, always, always advocated
>>> nationalization of the banks and democratic accountability of the
>>> Central Bank. That is what should be meant by fundamental change
>>> in the monetary system (any monetary system, like money itself, is
>>> by definition debt-based). Isn't it time for fundamental change?
>>
>> I really doubt that that's what Kucinich meant. His language had
>> all the marks of hard money nuttery.
>>
>> Doug
>
>
> Kucinich opposes the privatized nature of the Federal Reserve but he
> also rails against fractional reserve banking and believes we should
> require all banks to have full reserves for the money they lend.
>
> Nationalizing the Fed COULD be a fine idea (but this is really
> dependent on many things) but abolishing fractional-reserve banking
> is nuttery.
Not the least little bit. My venerable Keynesian professor of monetary economics at Columbia 60 years ago, J. W. Angell, was a long- time advocate of what, back in the day, was called "100% money." By eliminating fractional-reserve banking, the amount of credit provided to the economy is determined by the sum of voluntary savings, long- term investment in bank capital, and credit provided by the central bank. Thus the central bank could at will limit credit expansion in inflationary conjunctures and increase the supply of credit in deflationary ones. This mechanism is vital to any real economic planning and supremely so to socialist economic planning.
Shane Mage
"Thunderbolt steers all things...it consents and does not consent to be called Zeus."
Herakleitos of Ephesos