tag:blogger.com,1999:blog-6245381193993153721.post6837602829822739446..comments2024-03-28T17:08:15.784-07:00Comments on Social Democracy for the 21st Century: A Realist Alternative to the Modern Left: What was the Greatest Mistake of Lionel Robbins’s Life?Lord Keyneshttp://www.blogger.com/profile/06556863604205200159noreply@blogger.comBlogger13125tag:blogger.com,1999:blog-6245381193993153721.post-40686777850624328572012-08-10T08:07:10.232-07:002012-08-10T08:07:10.232-07:00(1) I doubt you've written even one post extol...(1) I doubt you've written even one post extolling the benefits of free markets or pushing for less govt interference in the economy. Even if you have, such posts certainly make up less than 1% of the total.<br /><br />(2) & (3) Empirical evidence shows that allowing branch banking led to fewer bank failures during the Depression both among US states and countries: <br /><br />http://www.econ.yale.edu/seminars/echist/eh03/mitchener-033103.pdfAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-75097423219880859292012-08-09T14:47:58.452-07:002012-08-09T14:47:58.452-07:00Nice! Thanks so much.Nice! Thanks so much.Patchnoreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-11390709056984745462012-08-09T12:17:10.183-07:002012-08-09T12:17:10.183-07:00While that is true, inequality is getting worse in...While that is true, inequality is getting worse in most countries after the crisis. This means that although the overall pie is smaller, those at the top get a bigger proportionate slice. If some of these people think in relative terms -- i.e. my wealth is important in relation to the wealth of others -- then they are indeed better off.<br /><br />Is this the case? To some extent, I think, yes. Is this the cause of the hostility to stimulus? Almost certainly not.Philip Pilkingtonhttp://www.nakedcapitalism.comnoreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-56495186553580995432012-08-09T12:05:20.883-07:002012-08-09T12:05:20.883-07:00On why Canada did not see a financial sector meltd...On why Canada did not see a financial sector meltdown from 1929-1933, because of implicit government guarantees and interventions: <br /><br />Kryzanowski, Lawrence, and Gordon S. Roberts. 1993. "Canadian Banking Solvency, 1922-1940," Journal of Money, Credit, and Banking 25: 361-376.<br /><br />p. 373:<br /><br /><i>"This paper challenges the accepted view ... that diversification benefits from national branching kept Canadian banks solvent and prevented runs and failures in the 1930s ... Under our alternative hypothesis, the better failure performance of Canadian versus U.S. banks is attributed to the Canadian government policy of forbearance through implicitly guaranteeing all deposits at par, primarily by standing ready to lend to banks and by facilitating the merger of troubled and healthier banks. ... after a major bank failure in 1923 and several "forced" mergers of "failing" banks in 1921-1923 (and 1931), this policy provided an implicit guarantee that no other bank would be allowed to fail and cause losses to depositors."</i>Lord Keyneshttps://www.blogger.com/profile/06556863604205200159noreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-35786695943606816442012-08-09T11:55:47.533-07:002012-08-09T11:55:47.533-07:00See also:
Charles W. Calomiris, U.S. Bank Deregul...See also:<br /><br />Charles W. Calomiris, <i>U.S. Bank Deregulation in Historical Perspective</i>, p. 17ff.:<br /><br /><i>"The Bank of Montreal - the depository of most government funds, and the largest of the Canadian banks, with 20 percent of the banking system's assets in 1910 - sometimes acted as a private lender of last rsort, stepping in to assist troubled banks."</i><br /><br />Kryzanowski, Lawrence, and Gordon S. Roberts. 1993. "Canadian Banking Solvency, 1922-1940," <i>Journal of Money, Credit, and Banking</i> 25: 361-376.Lord Keyneshttps://www.blogger.com/profile/06556863604205200159noreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-9432139784463076152012-08-09T11:46:23.667-07:002012-08-09T11:46:23.667-07:00In 1907, the government through The Bank of Montre...In 1907, the government through The Bank of Montreal acted as a lender of last resort.<br /><br />Georg Rich, <i>The Cross of Gold: Money and the Canadian Business Cycle, 1867-1913</i>, p. 33:<br /><br /><i>"Notably, the Bank of Montreal, Canada's largest financial institution before World War I, played a unique role in the Canadian financial system. The Bank accounted for one-fourth to one-fifth of aggregate chartered-bank assets (Neufeld, 1972, Table 4:6), acted as Canada's principal foreign exchange dealer, served as fiscal agent to governments (see Chapter 7), and provided banking services to other banks."</i>Lord Keyneshttps://www.blogger.com/profile/06556863604205200159noreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-63309274224827452522012-08-09T11:41:19.630-07:002012-08-09T11:41:19.630-07:00Michael D. Bordo and Anna J. Schwartz (eds.), A Re...Michael D. Bordo and Anna J. Schwartz (eds.), A Retrospective on the Classical Gold Standard, 1821-1931, p. 278:<br /><br /><i>"The Bank of Montreal acted as the government's fiscal agent and on rare occasions performed some central-banking functions (for example, during the financial crisis of 1907)."</i>Lord Keyneshttps://www.blogger.com/profile/06556863604205200159noreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-46277749601795811302012-08-09T11:39:16.804-07:002012-08-09T11:39:16.804-07:00Michael D. Bordo and Anna J. Schwartz (eds.), A Re...Michael D. Bordo and Anna J. Schwartz (eds.), <i>A Retrospective on the Classical Gold Standard, 1821-1931</i>, p. 308:<br /><br /><i>"Bordo asked about the role of the Bank of Montreal and other large Canadian commercial banks in this period. He thought that in some ways the Canadian experience may have been similar to the experience of the United States in the early part of the nineteenth century ... In particular, having a large commercial bank committed to the maintenance of convertibility may be sufficient to ensure the stability of the system."</i>Lord Keyneshttps://www.blogger.com/profile/06556863604205200159noreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-35359101881683982012-08-09T11:33:51.002-07:002012-08-09T11:33:51.002-07:00Patch@August 9, 2012 11:09 AM
(1) "Canada un...Patch@August 9, 2012 11:09 AM<br /><br />(1) <i>"Canada united as a confederation in 1867, and Bank of Montreal expanded west. During the 1860s, it became Canada's de facto central bank until the 1935 creation of the Bank of Canada. By 1914 Bank of Montreal was the nation's largest. It bought the British Bank of North America (1918), Merchants Bank of Canada (1922), and Molsons Bank (1925)."</i><br /><br />http://www.hoovers.com/company/Bank_of_Montreal/ctyxif-1-1njhxk.html<br /><br />(2) Douglas McCalla and Michael Huberman, <i>Perspectives on Canadian Economic History</i>, p. 265:<br /><br /><i>"Third, the Bank of Montreal (founded in 1817) emerged very early as the government's bank performing many central bank functions.</i>"<br /><br />(3) <i>Canada's Entrepreneurs: From The Fur Trade to the 1929 Stock Market Crash</i>: <br /><br /><i>"They also augmented the bank's influence on government policy; in fact, Clouston came to view his bank as Canada's central bank, and, as Marchildon remarks, ..." etc.</i><br /><br />http://books.google.com/books?id=EqpAnILPISoC&pg=PT374&lpg=PT374&dq=%22his+bank+as+Canada%27s+central+bank,+and,+as+Marchildon+remarks,%22&source=bl&ots=ciBTdHCqMI&sig=vXw_VnpLhS4gTGsDbc8mKd4WymI&hl=en&sa=X&ei=rv8jUOKVI8ygmQWw0YGoAQ&ved=0CDMQ6AEwAA#v=onepage&q=%22his%20bank%20as%20Canada%27s%20central%20bank%2C%20and%2C%20as%20Marchildon%20remarks%2C%22&f=false <br /><br />For government interventions to stabilise Canada's financial system pre-1930:<br />(4)Charles Goodhart and Gerhard Illing (eds.), <i>Financial Crises, Contagion, and the Lender of Last Resort: A Reader</i>, p. 121:<br /><br /><i>"However, the Bank of Montreal (founded in 1817) very early became the government's bank and performed many central bank functions. Because Canadian banks kept most of their reserves on 'call' in the New York money market, they were able in this way to satisfy the public's demand for liquidity, again precluding the need for a central bank. <br /><b>On two occasions, 1907 and 1914, however, these reserves proved inadequate to prevent a liquidity crisis and the Government of Canada had to step in to supplement the reserves.</b></i>Lord Keyneshttps://www.blogger.com/profile/06556863604205200159noreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-51108263400257522702012-08-09T11:09:06.477-07:002012-08-09T11:09:06.477-07:00Lord keynes, do you have a source on the bank of M...Lord keynes, do you have a source on the bank of Montreal in the gilded age? I am quite curious about canada. Thanks.Patchnoreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-13045405412675361512012-08-09T09:38:47.727-07:002012-08-09T09:38:47.727-07:00(1) It is not my view that "all forms of dere...(1) It is <i>not</i> my view that "all forms of deregulation are bad, only govt solutions work" - this is a stupid straw man.<br /><br />(2) As for Canada in the 1930s, it was government intervention and implicit guarantees that provided banking stability for Canada during the Great Depression. The modern Canadian central bank – the Bank of Canada – did not exist until 1935, but the large and powerful Bank of Montreal appears to have functioned as a de facto central bank for Canada from the 1860s until 1935. <br /><br />(3) Australia had no restrictions on branch banking, but it too suffered a severe recession in the 1930s, which does not support your case.Lord Keyneshttps://www.blogger.com/profile/06556863604205200159noreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-45336392099508063102012-08-09T09:01:47.469-07:002012-08-09T09:01:47.469-07:00How about not having restrictions on branch bankin...How about not having restrictions on branch banking to prevent so many US bank failures during the Depression and the resulting contraction of the money supply? (USA: 9,000, Canada: zero)<br /><br />Oh, wait I forgot--all forms of deregulation are bad, only govt solutions work. Please forgive my thoughtcrime.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-28318815135332917282012-08-09T08:04:23.797-07:002012-08-09T08:04:23.797-07:00Yes, I think a lot of us can say that we could loo...Yes, I think a lot of us can say that we could look back at our old anti-stimulus arguments and wonder, "What were we thinking?!"<br /><br />A lot of politics could be seen as a divide between interests of various groups. A zero sum game, so to speak.<br /><br />But stimulus packages during recession are different. Having or not having good counter-cyclical policies is something that either makes **everyone** better off or makes **everyone** worse off. There is no friction between special interest groups here - nobody ever benefited from lack of demand during recession. Neither the wealthy nor the poor, neither the private sector nor the public sector.Prateekhttps://www.blogger.com/profile/15287835907015065883noreply@blogger.com