Socialist Progressives

Nothing sends a shiver down my spine the way some idiot banker boasts that when a bank makes a loan, it "creates" money. The money isn't there, really, but now the borrower has it in his account; he can make withdrawals and spend it or pay his workers for services rendered.

This isn't the Fed chairman just casually hitting the print button and sending freshly printed cash to Goldman Sachs or JPMorganChase at 0% interest. (That's the next best thing to what the banks are doing; for something actually worse, imagine organized criminals counterfeiting billions for their own purposes.) This is free money. It isn't connected to any actual wealth. We have more money chasing the same amount of wealth, so things have been thrown out of balance.

This is called inflation. It's bad enough when the government does it; it a potential disaster when organized criminals do it -- whether we're talking about Al Capone or Carlo Gambino; or Legs Dimon or Pretty Boy Lloyd.

I think the difference between the Reaganauts of the eighties and the deregulators since is that the Reaganauts had a good appreciation of Adam Smith; the deregulators act like they've never heard of economics, let alone read anything by a classical economist.