French President confronts mob, Wins.

[Rabid]

If it is considered out of topic, thanks for moving it in a new thread

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You mean buying when the price is low and selling when the price is high? Something which helps stabilize prices?

Well, when it help stabilize prices and promote innovation, yes... But there is a middle between total state control over prices and Adam Smith's invisible hand. What I advocate is a tight control over essential resources' prices so that they don't go too far (for food, electricity or oil, or any of these essential resources), but in such a way that it don't repel people from selling us theses resources in the first place. It's an equilibrium to find.

How do you regulate lending to the point of eliminating speculation? You can eliminate people who manipulate prices, but I don't see how you can completely and utterly control speculation by regulation.

Eliminating speculation is impossible in a capitalist system, as it is somehow the very basis of this system. But we can try to find a way for a reasonable speculation to take place, and find a way to severely discourage the kinds of speculation that are harmful for the people or the economy. It demand a bit of hindsight, but it's the role of the politics to have it, after all...

This is so incredibly bad I don't know where to start. I hope you are refering to microcredit, which wasn't done by mainstream banks because lending poor people money is risky (they can just take it and run). Also, most rich people aren't interested in borrowing money because... you have to pay it back. So the rich people who borrow money tend to be those who think they can make more than the cost of the loan and the required interest. This help fund projects by allocating capital to ones that people think offer the highest rate of return.

Well, today, people who try to get credit to make their business run [1] see themselves cut from credit, because banks a now far more afraid of potential losses. But in doing so, the banks are hurting the economy. Which somehow led us to where we are now. What we need is a responsible management of credit, for it to go where it is needed, where it will we repaid with its interests, and where it will help the economy in general. I did not say : "Let credit flow over the Poors and fuck the Richs". That's not what I said, and that is not what I would advocate ; for it would be irresponsible. I just demand a responsible management of credit. Banks today are even richer than what they were before the Crisis, it's not as if they couldn't afford to do their job properly.

Yes, the interest rate is complety unrelated to the economic growth rate. It isn't like making it more expensive for people to invest in new projects could possibly hurt the economy

There is left wing economics and then there is popualism. You are definately practicing the later.

"It isn't like making it more expensive for people to invest in new projects could possibly hurt the economy" ==> I somehow fear that you aren't totally aware of the whole picture, here. You see, when a banker nowadays lend his money, what he watch isn't "Will it be good or bad for the economy if I allow this guy to borrow me money ?". What they think is "Will I make more money with this guy or with another one ?". What it lead us to is that if banks see a part of their 'lending capacity' regulated, out of their direct control, they will try to compensate with the unregulated part in order to make more money and recover their shortfall. This is basic capitalist logic.

Can you define populism so I can answer you on this part ?

That is a really bad idea. Short term inflation helps the growth rate. In the long run it fucks up the economy. If people were wll educated in economics and valued long term benefits this wouldn't be a problem.

Yes, yes, we know, we have have seen what happened with Germany when hyper-inflation strike. When I spoke about democratic control, I wasn't telling "Let the Europarliament take the role of the ECB !". I was saying that today the ECB is a totally independent body of the European Community. As far as I know, even the European Commission can't force them to change their politic. What I want as an european Citizen is for the EC (European Commission), or the EP (EuroParliament) to somehow having the possibility to tell the ECB that "Sorry, but your monetary politic now is hurtful to the European Economy. Could you please lower the exchange rate of the Euro so we could be able to export things ?".
Doesn't it seem logic for the Executive or Legislative body of the EU to have the possibility of influencing the behavior of the ECB ?

No. Having the same currency reduces transaction costs. While it does mean you can't fine tune your economy as effectively, it should increase overall productivity.

Imagine this :
Only the Euro has a value on the world market. The money of the Eurozone are indexed on the Euro. Going from one Euro-Currency to one another don't provoke a transaction cost, because they just are a measure of the Euro, somehow... Well, it's complicated, but at least it would allow to fine-tune the internal economy inside the Eurozone.
But, yeah, I recognize that a LOT of headaches are avoided with a single currency, which was the Goal of the Euro, after all.


[1] I'm not talking of only little business. Even business which have an annual turnover of several million euros have difficulty to find credit, which slow down their activities a lot. This, in return, slow the Economy, and worsen the Crisis. It is a Vicious Cycle.
And jobs in these little companies represent more than half of all French jobs. So you can picture what "business difficulties" for businesses like that can represent for the French economy...

[Samuel]

What I advocate is a tight control over essential resources' prices so that they don't go too far (for food, electricity or oil, or any of these essential resources), but in such a way that it don't repel people from selling us theses resources in the first place. It's an equilibrium to find.

Or you could just provide subsidies to poor people so that they can purchase these goods and not mess around with price mechanisms. It is cheaper, easier and doesn't lead to black markets.

But we can try to find a way for a reasonable speculation to take place, and find a way to severely discourage the kinds of speculation that are harmful for the people or the economy.

And how do you determine what is harmful and what isn't?

Banks today are even richer than what they were before the Crisis, it's not as if they couldn't afford to do their job properly.

Wait, how does that work? They make money by lending it out? Shouldn't they be poorer? I'm aware panics generally lead to stupid behavior, but something sounds off.

What it lead us to is that if banks see a part of their 'lending capacity' regulated, out of their direct control, they will try to compensate with the unregulated part in order to make more money and recover their shortfall. This is basic capitalist logic.

If they could increase the profits in those fields now, they probably would already doing it.

Can you define populism so I can answer you on this part ?

I just that you are putting forth ideas that might sound good, but have horrible, horrible implementation problems in practice.

Doesn't it seem logic for the Executive or Legislative body of the EU to have the possibility of influencing the behavior of the ECB ?

In the US that is exactly how the Federal Reserve System is supposed to work. I believe current problems with the fed are the fact it isn't insulated enough from politics.

Only the Euro has a value on the world market. The money of the Eurozone are indexed on the Euro. Going from one Euro-Currency to one another don't provoke a transaction cost, because they just are a measure of the Euro, somehow... Well, it's complicated, but at least it would allow to fine-tune the internal economy inside the Eurozone.

You mean the gold standard? Where every currency was indexed to a certain value of eurosgold? If your currency was set to a benchmark, how could you fine tune your economy? Inflation or deflation would change the relative value of your currency and you would have to spend foreign capital reserves in order to defend the exchange rate.

[K. A. Pital]

Or you could just provide subsidies to poor people so that they can purchase these goods and not mess around with price mechanisms. It is cheaper, easier and doesn't lead to black markets.

Subsidies must also have rules, and setting them is always problematic. Money laundering at subsidies is also a common problem. Yes, it does not lead to black markets, but it can further distort the market. If you want a certain beneficial distortion in the market, you may use any means necessary, so as long as the solution is technically sound.