[P2P-F] For Joseph Stiglitz, the ECB is wrong

Wed Oct 5 15:23:39 CEST 2011

My comment is below

For Joseph Stiglitz, the ECB is wrong

The main player in the fight against the debt crisis in the eurozone, the  
ECB is grounded in “a philosophy that has failed,” accuses Joseph  
Stiglitz. Interviewed by the Czech daily Hospodářské noviny, the winner of  
the Nobel Prize for Economics criticises the “ideological” independence of  
central banks, which “have mastered the financial crisis much less  
successfully” than banks led by governments. For “instead of being  
answerable to the citizens, they answered to the markets.” The ECB should  
 from now on focus not solely on inflation but also on policies for  
employment, growth and financial stability.

Joseph Stiglitz does not foresee economic recovery in the coming years, as  
it is being undermined by, among other things, the austerity plans drawn  
up to control European states’ sovereign debts. What has to be built now  
is “an institutional framework that will create stability and  
responsibility.” According to the Nobel Prizewinner, Europe can learn from  
India, where the central bank is “independent and professional, but at the  
same time accountable to government.”

http://www.presseurop.eu/en/content/article/1017241-everything-possible-even-burst-energy

The take away, for me, is that quite likely the primary  difference, as  
noted by Stiglitz is that government operated banking tends to operate as  
a public utility, aka as a contributor to the economic commons.  
Transferring this into the advocacy of Ellen Brown toward state run  
banking, the primary positive is that the State Bank of North Dakota  
(population being below 700,000) is that that system has an ethos which  
supports the culture of the commons. I doubt that this is at all directly  
transferable when banking lacks such an ethos/culture. That is it would be  
extremely improbable that the same effects would occur in such places as  
New York or Washington DC for only two examples. In Washington DC at the  
US Treasury, it is clearly a situation where Goldman Sachs and the vampire  
squid horde have taken over the context of governance to serve private  
interests. This also make the re-regulation of the banking sector as a  
commons, including closing down structurally dangerous institutions and  
re-establishing a perp parade is important, and unlikely under the current  
corporate capture. The principle of the commons is the important piece,  
not a state which has a population less than most major cities in the US.  
And it make the state run banking gambit a false option except where  
states have a similarly low population level. It is the privatization of   
the monetary process is the core problem, and a state run banking system  
in most other places would be basically inseparable from the culture of  
greed where it is well established. It becomes very much like a logical  
fallacy, but then Brown is an attorney who specialized in preparing briefs.

Tadit
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