(BQ) Part 2 book "Free prices now - Fixing the economy by Abolishing the fed" has contents: The crony capitalist conundrum, the progressive paradox, where does this leave the poor, where does this leave the poor, a new monetary system, is the fed’s behavior moral,.and other contents. | 19 Banking and Finance: The Great Fiction I n the 1930s, communism and fascism vied for world dominance. Under the former, government owned the economy. Under the latter, government controlled the economy, but did not directly own it. The fascist system was really just a theatrical variant on the monarchical/mercantilist system that had prevailed for centuries in Europe, which had always possessed signal advantages for public officials. If the economy performs poorly, it can be blamed on markets or more tellingly on what President Theodore Roosevelt called “malefactors of great wealth.” If the economy performs well, then government, or the government’s central bank, can claim full credit. • 117 118 • Free Prices Now! The degree of government control under this kind of system varies. In the US, control of the banks, and increasingly the entire financial system, is tight. There are few, if any, free prices. The free price system has been replaced by a host of rules, subsidies, guarantees, and outright price controls. The fiction is maintained that banking is part of a market system. But it is not. It is strictly a department of government. Moreover the rules that have been established for it make no sense, so it is forever in crisis. A department of government, it is also a ward of government. This system can be very lucrative for public officials. Banks can be counted on to buy US government debt in massive quantities. Indeed that is currently their primary purpose. In addition, firms so completely dependent on Washington offer campaign contributions to elected officials and well-paid jobs to former officials and regulators. If regulations are violated, fines or court settlements can also be imposed, in addition to the usual taxes. These in effect become windfalls for the political system. The wards do well too. They have first access to all the new money being printed by the Fed, and can either speculate with it or lend it on. Should securities market .
