Friday, December 19, 2008

Not Quite Radical

Minus the amazement about the money multiplier, this proposal published in Yes! Magazine bears a superficial resemblance to mine. The big difference, of course, is that Brown would have the good citizens assume responsibility for all the liabilities of the banking system she would seize. This is why I have argued against bank nationalization and for new public institutions to take their place. A minor note: Germany is a somewhat more substantial instance of public banking than North Dakota. Not that I have anything against North Dakota. In fact, we’re having their weather right now in the Pacific Northwest.


Anonymous said...

Very well done! Clear and direct.

I've made similar proposals, they were ignored.

I think the big problem for change in the ganking system is that the public does not understand and so the legislatures are easy to manipulate.

How could we get the public to understand how gankers work?

One possibility might be a computer game that starts with a simulation of unregulated wildcat banking, and then maybe takes it from there.

If a whole lot of kids understood the banking system, within 30 years or so we might be ready for some real change.

J Thomas

Peter Dorman said...

Ah, you bring back fond memories. Long, long ago I was an undergraduate in a Money & Banking course at the University of Wisconsin. The professor had set up a computerized game (this is the punch card era) in which each of us managed a bank, making a few stylized asset and liability decisions. We responded to noisy economic signals, and the sum of our choices made up the environment that determined the payoffs to each choice. Amazingly, in a class of hundreds, I (a primitive anarchist rebel) was banker of the week after the first round. I was cunning, brilliant: I could do no wrong. I was already wrestling with the pleasant temptation of selling out my ideals and copping a high level job at a real bank.

A few weeks later my virtual bank was utterly insolvent. Unfortunately, one option not permitted in this game was to pay myself a huge bonus after my temporary success.

Anonymous said...

In a wildcat banking game with hundreds of playes, coming out ahead the first week would paint a giant target on your ass.

Your game probably wasn't like that, though, probably you couldn't hold your opponents' debts and clear a whole lot at once.

Seriously, this is something that people just don't get. And if you try to explain it, mostly their eyes glaze over. (At least when I do. Maybe you do better.)

A game they can win at might get them to pay more attention.

J Thomas