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Monetary Policy Immorality

Chang29
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4/25/2015 11:37:34 PM
Posted: 1 year ago
Many governments, including the US mandate central banks to maximize employment and maintain price stability. Economists debate on how to execute these mandates using licentious monetary tools.

Changes in monetary policy affect every citizen differently, thus punishing some and rewarding others. Government economists" measure these affects in aggregates ignoring the individuals behind these numbers. Individuals that have planned for years can have their plan disrupted by a central bank"s response to an aggregate measured number with the change being explained as "animal spirits". Numbers conjured up like GDP, unemployment, and CPI mean nothing to individuals trying to make plans, yet are very important to central bank economists. Economists using these meaningless numbers to set policies creating booms and busts, which actually affect citizens, can only be described as immoral.
A free market anti-capitalist

If it can be de-centralized, it will be de-centralized.
Diqiucun_Cunmin
Posts: 2,710
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4/26/2015 12:33:27 AM
Posted: 1 year ago
At 4/25/2015 11:37:34 PM, Chang29 wrote:
Many governments, including the US mandate central banks to maximize employment and maintain price stability. Economists debate on how to execute these mandates using licentious monetary tools.

Changes in monetary policy affect every citizen differently, thus punishing some and rewarding others. Government economists" measure these affects in aggregates ignoring the individuals behind these numbers. Individuals that have planned for years can have their plan disrupted by a central bank"s response to an aggregate measured number with the change being explained as "animal spirits". Numbers conjured up like GDP, unemployment, and CPI mean nothing to individuals trying to make plans, yet are very important to central bank economists. Economists using these meaningless numbers to set policies creating booms and busts, which actually affect citizens, can only be described as immoral.

Could you give concrete examples of that? I don't really see how it's immoral - it's the individual's decision to buy bonds, etc. and there's nobody coercing them into doing it...
The thing is, I hate relativism. I hate relativism more than I hate everything else, excepting, maybe, fibreglass powerboats... What it overlooks, to put it briefly and crudely, is the fixed structure of human nature. - Jerry Fodor

Don't be a stat cynic:
http://www.debate.org...

Response to conservative views on deforestation:
http://www.debate.org...

Topics I'd like to debate (not debating ATM): http://tinyurl.com...
Chang29
Posts: 732
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4/26/2015 1:08:52 AM
Posted: 1 year ago
At 4/26/2015 12:33:27 AM, Diqiucun_Cunmin wrote:
At 4/25/2015 11:37:34 PM, Chang29 wrote:
Many governments, including the US mandate central banks to maximize employment and maintain price stability. Economists debate on how to execute these mandates using licentious monetary tools.

Changes in monetary policy affect every citizen differently, thus punishing some and rewarding others. Government economists" measure these affects in aggregates ignoring the individuals behind these numbers. Individuals that have planned for years can have their plan disrupted by a central bank"s response to an aggregate measured number with the change being explained as "animal spirits". Numbers conjured up like GDP, unemployment, and CPI mean nothing to individuals trying to make plans, yet are very important to central bank economists. Economists using these meaningless numbers to set policies creating booms and busts, which actually affect citizens, can only be described as immoral.

Could you give concrete examples of that? I don't really see how it's immoral - it's the individual's decision to buy bonds, etc. and there's nobody coercing them into doing it...

Example, current EU expansionary monetary policy is punishing Euro Zone importers, in an attempt to affect a macroeconomic measure. The importers are being financially coerced by central bankers, to change harmless behavior for the benefit of others. This change is not due to market forces, desires of the consumers, or even retribution from losing an election. These importers are financially punished in the hope that an aggregate indicator might move in the direction that central bankers desire.
A free market anti-capitalist

If it can be de-centralized, it will be de-centralized.
Honnen
Posts: 1
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4/26/2015 3:34:58 AM
Posted: 1 year ago
At 4/26/2015 1:08:52 AM, Chang29 wrote:
At 4/26/2015 12:33:27 AM, Diqiucun_Cunmin wrote:
At 4/25/2015 11:37:34 PM, Chang29 wrote:
Many governments, including the US mandate central banks to maximize employment and maintain price stability. Economists debate on how to execute these mandates using licentious monetary tools.

Changes in monetary policy affect every citizen differently, thus punishing some and rewarding others. Government economists" measure these affects in aggregates ignoring the individuals behind these numbers. Individuals that have planned for years can have their plan disrupted by a central bank"s response to an aggregate measured number with the change being explained as "animal spirits". Numbers conjured up like GDP, unemployment, and CPI mean nothing to individuals trying to make plans, yet are very important to central bank economists. Economists using these meaningless numbers to set policies creating booms and busts, which actually affect citizens, can only be described as immoral.

Could you give concrete examples of that? I don't really see how it's immoral - it's the individual's decision to buy bonds, etc. and there's nobody coercing them into doing it...

Example, current EU expansionary monetary policy is punishing Euro Zone importers, in an attempt to affect a macroeconomic measure. The importers are being financially coerced by central bankers, to change harmless behavior for the benefit of others. This change is not due to market forces, desires of the consumers, or even retribution from losing an election. These importers are financially punished in the hope that an aggregate indicator might move in the direction that central bankers desire.

Very simple. The expansion of the money supply via quantitative easing devalues existing dollar-based reserves of individuals and organizations, thus transferring wealth from those existing parties to entities such as investment banks (e.g. Goldman Sachs) who derive monetary compensation from servicing government debt. They are paid from the creation of the new devaluing assets. This is essentially a wealth transfer from savers to favored government institutions and to government itself.
Chang29
Posts: 732
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4/29/2015 8:56:31 PM
Posted: 1 year ago
Nobody is willing to defend morality of monetary policy?

Economists do not like honestly debating the ethics of monetary policy, but will tell everyone that they know best for everyone else.
A free market anti-capitalist

If it can be de-centralized, it will be de-centralized.
Diqiucun_Cunmin
Posts: 2,710
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4/29/2015 9:55:17 PM
Posted: 1 year ago
At 4/29/2015 8:56:31 PM, Chang29 wrote:
Nobody is willing to defend morality of monetary policy?

Economists do not like honestly debating the ethics of monetary policy, but will tell everyone that they know best for everyone else.

You should consider moving here. :P You'll like it since we have a linked exchange rate system and monetary policy is only used to stabilise our exchange rate with the USD.
The thing is, I hate relativism. I hate relativism more than I hate everything else, excepting, maybe, fibreglass powerboats... What it overlooks, to put it briefly and crudely, is the fixed structure of human nature. - Jerry Fodor

Don't be a stat cynic:
http://www.debate.org...

Response to conservative views on deforestation:
http://www.debate.org...

Topics I'd like to debate (not debating ATM): http://tinyurl.com...
Chang29
Posts: 732
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4/29/2015 10:13:42 PM
Posted: 1 year ago
At 4/29/2015 9:55:17 PM, Diqiucun_Cunmin wrote:
At 4/29/2015 8:56:31 PM, Chang29 wrote:
Nobody is willing to defend morality of monetary policy?

Economists do not like honestly debating the ethics of monetary policy, but will tell everyone that they know best for everyone else.

You should consider moving here. :P You'll like it since we have a linked exchange rate system and monetary policy is only used to stabilise our exchange rate with the USD.

I am assuming "here" is Hong Kong. Hong Kong would be even better, if the currency peg were removed.

Hong Kong is a subject that ASEAN economic intellectuals do not like to discuss. Opressive governments in ASEAN want markets controlled, so economists provide policies guidance in compliance with governmental strategic goals.

What do you think of the morality of monetary policy?
A free market anti-capitalist

If it can be de-centralized, it will be de-centralized.
Diqiucun_Cunmin
Posts: 2,710
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4/30/2015 11:51:16 AM
Posted: 1 year ago
At 4/29/2015 10:13:42 PM, Chang29 wrote:
At 4/29/2015 9:55:17 PM, Diqiucun_Cunmin wrote:
At 4/29/2015 8:56:31 PM, Chang29 wrote:
Nobody is willing to defend morality of monetary policy?

Economists do not like honestly debating the ethics of monetary policy, but will tell everyone that they know best for everyone else.

You should consider moving here. :P You'll like it since we have a linked exchange rate system and monetary policy is only used to stabilise our exchange rate with the USD.

I am assuming "here" is Hong Kong.
Did you discover through my profile or because of the LERS? (That's our abbreviation for the linked exchange rate system)
Hong Kong would be even better, if the currency peg were removed.
A floating exchange rate would be too unstable, and will only increase investment risk and reduce investment here. The HKMA will still have to stabilise currency then (possibly through OMOs) but that will be less transparent than the LERS.

Pegging to the renminbi is out of the question at the moment. A basket of currencies is the only viable alternative, though the US is still a major trading partner, so the depreciation of the USD will still hit us hard, just very slightly less hard, and it will be less transparent.

Hong Kong is a subject that ASEAN economic intellectuals do not like to discuss. Opressive governments in ASEAN want markets controlled, so economists provide policies guidance in compliance with governmental strategic goals.
Yeah, we do prosper economically. No capital gains tax, no tariffs, etc., have served our economy well. Unfortunately, the wealth gap is gigantic (though I know you believe inequality is fictional, from our previous conversation).

What do you think of the morality of monetary policy?
As you can probably guess, I think the government should implement policies that will do the greatest good for society as a whole. In the case of zero-sum games, there will definitely be a necessity to give up some people's interests. If monetary policy is significantly better for society as a whole than the lack thereof, then I see no immorality in it. I mean, entrepreneurs take risks into account when they make economic decisions, and that includes taking into account the policies that a central bank is likely to make, right?
The thing is, I hate relativism. I hate relativism more than I hate everything else, excepting, maybe, fibreglass powerboats... What it overlooks, to put it briefly and crudely, is the fixed structure of human nature. - Jerry Fodor

Don't be a stat cynic:
http://www.debate.org...

Response to conservative views on deforestation:
http://www.debate.org...

Topics I'd like to debate (not debating ATM): http://tinyurl.com...
Chang29
Posts: 732
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4/30/2015 6:54:33 PM
Posted: 1 year ago
At 4/30/2015 11:51:16 AM, Diqiucun_Cunmin wrote:
At 4/29/2015 10:13:42 PM, Chang29 wrote:
At 4/29/2015 9:55:17 PM, Diqiucun_Cunmin wrote:
At 4/29/2015 8:56:31 PM, Chang29 wrote:
Nobody is willing to defend morality of monetary policy?

Economists do not like honestly debating the ethics of monetary policy, but will tell everyone that they know best for everyone else.

You should consider moving here. :P You'll like it since we have a linked exchange rate system and monetary policy is only used to stabilise our exchange rate with the USD.

I am assuming "here" is Hong Kong.
Did you discover through my profile or because of the LERS? (That's our abbreviation for the linked exchange rate system)
Hong Kong would be even better, if the currency peg were removed.
A floating exchange rate would be too unstable, and will only increase investment risk and reduce investment here. The HKMA will still have to stabilise currency then (possibly through OMOs) but that will be less transparent than the LERS.

Pegging to the renminbi is out of the question at the moment. A basket of currencies is the only viable alternative, though the US is still a major trading partner, so the depreciation of the USD will still hit us hard, just very slightly less hard, and it will be less transparent.

Instability is safety, whereas stability creates crashes, the 1997 Asian financial crisis was caused by currency pegs.


Hong Kong is a subject that ASEAN economic intellectuals do not like to discuss. Opressive governments in ASEAN want markets controlled, so economists provide policies guidance in compliance with governmental strategic goals.
Yeah, we do prosper economically. No capital gains tax, no tariffs, etc., have served our economy well. Unfortunately, the wealth gap is gigantic (though I know you believe inequality is fictional, from our previous conversation).

A rich person can do no harm to a poor person without government force.


What do you think of the morality of monetary policy?
As you can probably guess, I think the government should implement policies that will do the greatest good for society as a whole. In the case of zero-sum games, there will definitely be a necessity to give up some people's interests. If monetary policy is significantly better for society as a whole than the lack thereof, then I see no immorality in it. I mean, entrepreneurs take risks into account when they make economic decisions, and that includes taking into account the policies that a central bank is likely to make, right?

Governmental policies, including government backed central banks should not promote or deny opportunity of anyone, only protect the negative rights of individuals. The economy is no a zero sum game, people should be able to determine their own future not influence by a bureaucrat attempting to manage a meaningless number like GDP, unemployment.
A free market anti-capitalist

If it can be de-centralized, it will be de-centralized.
Diqiucun_Cunmin
Posts: 2,710
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5/2/2015 9:33:00 PM
Posted: 1 year ago
At 4/30/2015 6:54:33 PM, Chang29 wrote:
At 4/30/2015 11:51:16 AM, Diqiucun_Cunmin wrote:
At 4/29/2015 10:13:42 PM, Chang29 wrote:
At 4/29/2015 9:55:17 PM, Diqiucun_Cunmin wrote:
At 4/29/2015 8:56:31 PM, Chang29 wrote:
Nobody is willing to defend morality of monetary policy?

Economists do not like honestly debating the ethics of monetary policy, but will tell everyone that they know best for everyone else.

You should consider moving here. :P You'll like it since we have a linked exchange rate system and monetary policy is only used to stabilise our exchange rate with the USD.

I am assuming "here" is Hong Kong.
Did you discover through my profile or because of the LERS? (That's our abbreviation for the linked exchange rate system)
Hong Kong would be even better, if the currency peg were removed.
A floating exchange rate would be too unstable, and will only increase investment risk and reduce investment here. The HKMA will still have to stabilise currency then (possibly through OMOs) but that will be less transparent than the LERS.

Pegging to the renminbi is out of the question at the moment. A basket of currencies is the only viable alternative, though the US is still a major trading partner, so the depreciation of the USD will still hit us hard, just very slightly less hard, and it will be less transparent.

Instability is safety, whereas stability creates crashes, the 1997 Asian financial crisis was caused by currency pegs.
That isn't the version of the story I heard. Now, 1997 is the year I was born, so obviously I couldn't have read the news then, but what we learn in econ class is that the LERS saved us from the crisis.

Hong Kong is a subject that ASEAN economic intellectuals do not like to discuss. Opressive governments in ASEAN want markets controlled, so economists provide policies guidance in compliance with governmental strategic goals.
Yeah, we do prosper economically. No capital gains tax, no tariffs, etc., have served our economy well. Unfortunately, the wealth gap is gigantic (though I know you believe inequality is fictional, from our previous conversation).

A rich person can do no harm to a poor person without government force.
We've done a similar discussion before, so let's just agree to disagree. ;)

What do you think of the morality of monetary policy?
As you can probably guess, I think the government should implement policies that will do the greatest good for society as a whole. In the case of zero-sum games, there will definitely be a necessity to give up some people's interests. If monetary policy is significantly better for society as a whole than the lack thereof, then I see no immorality in it. I mean, entrepreneurs take risks into account when they make economic decisions, and that includes taking into account the policies that a central bank is likely to make, right?

Governmental policies, including government backed central banks should not promote or deny opportunity of anyone, only protect the negative rights of individuals. The economy is no a zero sum game, people should be able to determine their own future not influence by a bureaucrat attempting to manage a meaningless number like GDP, unemployment.

Unemployment is not just a number. When you have unemployment, you have riots, abandoned babies, all that. Restoring the economy to the long-run equilibrium is important.
The thing is, I hate relativism. I hate relativism more than I hate everything else, excepting, maybe, fibreglass powerboats... What it overlooks, to put it briefly and crudely, is the fixed structure of human nature. - Jerry Fodor

Don't be a stat cynic:
http://www.debate.org...

Response to conservative views on deforestation:
http://www.debate.org...

Topics I'd like to debate (not debating ATM): http://tinyurl.com...
Diqiucun_Cunmin
Posts: 2,710
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5/2/2015 9:41:21 PM
Posted: 1 year ago
At 5/2/2015 9:33:00 PM, Diqiucun_Cunmin wrote:

Unemployment is not just a number. When you have serious unemployment, you have riots, abandoned babies, all that. Restoring the economy to the long-run equilibrium is important.

Fixed
The thing is, I hate relativism. I hate relativism more than I hate everything else, excepting, maybe, fibreglass powerboats... What it overlooks, to put it briefly and crudely, is the fixed structure of human nature. - Jerry Fodor

Don't be a stat cynic:
http://www.debate.org...

Response to conservative views on deforestation:
http://www.debate.org...

Topics I'd like to debate (not debating ATM): http://tinyurl.com...
Chang29
Posts: 732
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5/2/2015 11:14:00 PM
Posted: 1 year ago
At 5/2/2015 9:33:00 PM, Diqiucun_Cunmin wrote:
At 4/30/2015 6:54:33 PM, Chang29 wrote:
At 4/30/2015 11:51:16 AM, Diqiucun_Cunmin wrote:
At 4/29/2015 10:13:42 PM, Chang29 wrote:
At 4/29/2015 9:55:17 PM, Diqiucun_Cunmin wrote:
At 4/29/2015 8:56:31 PM, Chang29 wrote:
Nobody is willing to defend morality of monetary policy?

Economists do not like honestly debating the ethics of monetary policy, but will tell everyone that they know best for everyone else.

You should consider moving here. :P You'll like it since we have a linked exchange rate system and monetary policy is only used to stabilise our exchange rate with the USD.

I am assuming "here" is Hong Kong.
Did you discover through my profile or because of the LERS? (That's our abbreviation for the linked exchange rate system)
Hong Kong would be even better, if the currency peg were removed.
A floating exchange rate would be too unstable, and will only increase investment risk and reduce investment here. The HKMA will still have to stabilise currency then (possibly through OMOs) but that will be less transparent than the LERS.

Pegging to the renminbi is out of the question at the moment. A basket of currencies is the only viable alternative, though the US is still a major trading partner, so the depreciation of the USD will still hit us hard, just very slightly less hard, and it will be less transparent.

Instability is safety, whereas stability creates crashes, the 1997 Asian financial crisis was caused by currency pegs.
That isn't the version of the story I heard. Now, 1997 is the year I was born, so obviously I couldn't have read the news then, but what we learn in econ class is that the LERS saved us from the crisis.

Hong Kong is a subject that ASEAN economic intellectuals do not like to discuss. Opressive governments in ASEAN want markets controlled, so economists provide policies guidance in compliance with governmental strategic goals.
Yeah, we do prosper economically. No capital gains tax, no tariffs, etc., have served our economy well. Unfortunately, the wealth gap is gigantic (though I know you believe inequality is fictional, from our previous conversation).

A rich person can do no harm to a poor person without government force.
We've done a similar discussion before, so let's just agree to disagree. ;)

What do you think of the morality of monetary policy?
As you can probably guess, I think the government should implement policies that will do the greatest good for society as a whole. In the case of zero-sum games, there will definitely be a necessity to give up some people's interests. If monetary policy is significantly better for society as a whole than the lack thereof, then I see no immorality in it. I mean, entrepreneurs take risks into account when they make economic decisions, and that includes taking into account the policies that a central bank is likely to make, right?

Governmental policies, including government backed central banks should not promote or deny opportunity of anyone, only protect the negative rights of individuals. The economy is no a zero sum game, people should be able to determine their own future not influence by a bureaucrat attempting to manage a meaningless number like GDP, unemployment.

Unemployment is not just a number. When you have unemployment, you have riots, abandoned babies, all that. Restoring the economy to the long-run equilibrium is important.

The unemployment rate is just a number. Each individual is unemployed for a different reason, any policy will inherently have unintended victims and beneficiaries. Monetary policy changes will create victims.
A free market anti-capitalist

If it can be de-centralized, it will be de-centralized.
Cowboy0108
Posts: 420
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5/11/2015 10:40:00 PM
Posted: 1 year ago
Thinking in Aggregate is perfectly moral. Help out the majority of people, make the majority happy, make the economy better as a whole. Listening to the petty anecdotal arguments never did anything for me. Each story is only one person. We are talking about the economy of an entire nation.