The article doesn't deal at all with the reasons why we instituted the Federal Reserve in the first place. What would prevent another "J.P.Morgan" from gaining control of America's financial system again?

I missed the memo where the Federal Reserve prevents big business from exerting large control over the financial system...

The Federal Reserve's manipulation of the interest rate to pursue its own economic agenda amounts a price control on loanable funds. Good riddance.

The article is self-contradictory.

On the one hand it says that the Fed has been to blame for creating recessions and other crises.

On the other hand, it says that the Fed's operations have an "inconsequential" effect on interest rates and other key economic levers.

How can the Fed be primarily to blame for recessions and economic crises if its operations have an inconsequential effect on the economy?

That's basically the road map for reason.com, jamie. I have a friend who links to it all the time. In order to show that McDonald's employees shouldn't get a raise, they said that it was helpful to imagine a world where they made $100 an hour. In this world, clearly, McDonald's wouldn't be able to be competitive. Therefore, they should not get raises of any sort.

Except, obviously, they weren't asking for $100 an hour.

I don't read those articles any more, because the more I do, the more I get infuriated by the bass ackwards self-congratulatory pseudo arguments, with the gall to call themselves reason.com

Who cares about the article? Everyone knows the fed is bad. Even I know that and I'm a fucking liberal idiot.

yes but you need the Fed to bail out (with taxpayer dollars )
the Capitalists ( last time it was your Banking & Financial Industry wizards )
when they fuck up

We can't find money to do anything that helps people but we can find a few trillion to throw into a chemical war in Syria

Good ole USA

What would we have in place of the Fed?

The suggestion in the article is "nothing". But the article is stupid.

Invictus...the system that was in place BEFORE the Fed....you don't seriously think there was always a Fed, do you? Sheeesh...Especially since the article itself describes changes that happened in economic cycles AFTER the Fed came in to being...

Sacred - since you (ridiculously) brought up Minumum Wage -- raising minimum wage is such a red herring. Minimum wage isn't the issue AT ALL. "Entry Level" jobs are exactly that - ENTRY level...they are not supposed to be life-sustaining jobs! Who are the *idiots* that think that?

Question...do YOU, Sacred, plan on getting an entry-level job and working it forever? Or do you plan on improving yourself...working to advance your career by hard work and/or education? And if all the good liberals can look at *themselves* and say "Hell no I'm not working minimum wage!! I'm better than that..." then why do you hold such a bigotted view of those that *do* currently work minimum wage? In other words, you think the people working it now are incapable of advancing themselves? and if it is a little painful now...you need to share housing, etc, until you make more...SO WHAT! Who said you were supposed to have everything you want handed to you the first day you start working?

But here is the real problem...why stop at minimum wage? Why not institue price controls on *everything* instead...then you don't need min wage increases, right?

And in all your scenarios, businesses use fewer employees...and simply shut down...because if you remove the profit motive, why would anyone start a business?

So let's loook at McDonald's....all the good LibTards our there like to publish some GROSS revenue number and pretend there is money enough to pay everyone double the wage. WRONG. If you know anything abuot running a business, you will understand that from that gross revenue, you have to pay....wages, taxes, more taxes, rent, you have to buy supplies, you have to buy insurance, you have to pay for marketing and advertising, etc....by the time you are said and done, the Franchise owner of McDonald's is probably making 10-15% net profit. Yes, that's good...and you, good LibTard that you are, willsay then they should pay it out...uhhhhh.WHY? THEY risked their capital to start a franchise...THEY take the legal risk of being sued. THEY makeit possible...and if you double minimum wages...and suddenly the profit margin goes from 10-15% down to 6 or 7%...then it would be a *stupid* investment, and you can consistently get those sorts of returns in other places WITHOUT the hassle or the risk.

damn...it's really too bad they don't teach *real* business economics anymore.

I can't read the article. My apartment doesn't have Internet yet so I'm on my phone at a bookstore using wifi to get dozens of podcasts. One can't be alone with only ones thoughts in the 21st century.

Would we go back to having a real national bank? I'm not fan of the Fed, especially the dual mandate aspect, but you can't just eliminate such an important part of how the economy functions without having a serious alternative presented. Simply copying how things were done in the 19th century simply isn't good enough.

The article isn't stupid, y'all misinterpreted it.

The alternative to the Fed is competing currencies. The Federal Reserve System doesn't actually have to be completely eliminated (though it needs to be scaled back significantly), and in fact I imagine it would have to stay around (who else is going to manage the dollar?); but by ending the legal monopoly the Fed has on the money supply, by way of legalizing the creation of alternative currencies, two things would happen:

(1) The Federal Reserve would no longer be able to distort financial markets with its soft price controls on loanable funds; since the Fed attempts to manipulate interest rates by expanding or contracting the money supply, eliminating its monopoly on the money supply prevents it from creating its distortions (or at least, significantly reduces its ability to distort).
(2) Decentralization of control of the money supply allows people to use currencies instead of the US dollar if they so choose. This in turn requires the Federal Reserve to compete with other currency issuers and introduces accountability that simply does not exist in the current system.

Serious question, PE. How realistic is that?

It's obviously not going to happen anytime soon. Or put another way, I'd be really surprised if it happened sometime in the foreseeable future. Invictus was asking what other kind of system would exist absent the Fed, it's a relatively abstract question. Remember that the premise in the OP is that the Fed itself is dismantled -- that's a *huge* jump to make.

So to be clear, it's hypothetical. I wouldn't dare be so presumptuous as to think I could spell out a precise set of directions to go from here to there.

I gotta be honest, President Eden. That sounds completely unworkable. How are a bunch of competing currencies within a country going to be better for the economy than one?

I do appreciate that you're presenting an alternative though.

I didn't speak for or against raising the minimum wage. I spoke about the reasoning skills of a place called reason.com who seeks to come up with really ridiculous arguments such as "Let's imagine one business raised their wages to $100 an hour, in this case they would fail."

That falls under No Shit.

I've gotta agree with Invictus. Sure, it *could* work, but I see that as overcomplicating a relatively simple organization.

I agree with krellin, in the sense that the current minimum wage isn't the real problem. The problem is that people in minimum wage jobs don't have the means to better themselves, so they are stuck in entry-level jobs. The better solution would be to offer good, free education that actually prepares students to get better jobs. Unfortunately, the same people who are against increasing minimum wage are also (usually) against bettering our educational system. In reality, increasing minimum wage is more likely achievable, which is why many liberals are distracted by that (less good) solution.

But here is the thing. We will always need janitors and burger flippers and warehouse packers. We can't do away with minimum wage jobs by training everyone to be "better than" menial labor. Someone has to do these jobs.

We'll also always have HS/College kids who need a part-time job. Also, even entry-level jobs require competent senior staff and managers to oversee things. But, no one should be flipping burgers and McDonalds for 30 years.

Well, that's not true. I'm sure there are some people who are capable of doing no more than flipping a hamburger. But that isn't the majority of current McDonald's employees.

Agreed. No one should flip burgers at McDs for 30 years. But do you really think that there are enough HS/College kids willing to work at McDs for minimum wage *during the school year* to fill the positions needed especially during business hours and the lunch rush?

Quick answer: no, there aren't. And if you train everyone before they reach College to be better than a burger flipper, you cut your part time work force by all the college kids who are going to say "fuck that, I can make more doing something else". Hell, most college kids now don't work flipping burgers. If they work, they are in co-op positions or TAs.

I suggest McDs invest in some automated burger flippers.

And roombas for all cleaning work; then we can all take one extra day off per week (to spend with our families)

McDonald's creates robots for workers already, haven't you ever noticed? If there was a single greater option, I would never work there. McDonald's is never going to struggle to find people. They are too big.

If a job is in greater demand, it will pay more. This isn't a secret. If that means some "menial" position like, oh, I don't know, garbage collecting, gets $20/hour, I think we'll all live. (See what I did there?)