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Crime of the Millennium

Pretending that the fiscal policy of an economy can act "independently" of monetary policy (or vice versa) is precisely as absurd as suggesting that a car's transmission could operate "independently" from the engine. Indeed, this metaphor is very useful since the analogy of the fiscal and monetary policy of an economy and the engine and transmission of a car is precisely parallel.

As with a car's engine, fiscal policy "powers" any/every economy since it represents the physical economy itself. Conversely, monetary policy is merely the throttle (or "transmission") which regulates the speed of the economy. Obviously, neither of these elements can ever possibly be fully "independent" of the other. It is equally obvious in both these pairings which must be the dominant component and which must be the subordinate component.

With every car, its transmission is clearly subordinate to its engine. It is transmissions that are designed to optimize engine performance, and not engines being designed to optimize any particular transmission. Similarly, it is monetary policy that must naturally/automatically be subordinate to fiscal policy, rather than fiscal policy being designed to cater to the whims of private bankers (i.e. the Thieves).

Thus when B.S. Bernanke claims that central banks "must maintain their independence," he is not uttering some profound truth. Rather, he is merely repeating the bankers' Big Lie, a vacuous fiction that as a matter of simple logic never could have any validity. It is a lie with one very obvious purpose: to minimize scrutiny as a small cabal of bankers perpetrate the Crime of the Millennium.

This would probably be a good time to remind the Thieves how History tends to (eventually) reward them for their deeds. Less than a week after a news item appeared out of Iran reporting that the Iranian government had executed several bankers for a multi-billion dollar act of serial fraud, an interesting article appeared (ironically) on the blog for the Wall Street Journal itself.

The writer of that article notes the following:

The Code of Hammurabi, more than 3,700 years ago, stipulated that any Mesopotamian who violated the terms of a financial contract - including the futures contracts that were commonly used in commodities trading in Babylon - "shall be put to death as a thief."



...In medieval Catalonia, a banker who went bust wasn't merely humiliated by town criers who declaimed his failure in public squares throughout the land; he had to live on nothing but bread and water until he paid off his depositors in full. If, after a year, he was unable to repay, he would be executed...

But financial crimes weren't merely punished; they were stigmatized...

Contrast that with our modern societies where "punishment" for so-called white-collar crime is (at worst) nothing but a slap on the wrist in comparison to punishment handed out for blue-collar crime: the crimes of the Little People. The entire basis of this two-tier justice was the presumption (never supported with evidence) that the rich did not require as much deterrence from crime as the poor, and thus the sentences for their misdeeds did not need to be as severe.

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