Federal Reserve System and the base of "capitalist" America.

Good Luck, and Welcome to DDO! ----------------- Con did not clearly state the resolution, so I will state what believe it to be: Con's resolution: The Federal Reserve has had a positive affect on the U. S. economy. MClaro, of course, has taken the Con position. ----------------- It would seem that MClaro's main problem with the Federal Reserve is that there is not perfect stability in the U. S. market. He blames the Federal Reserve for "creating" the boom and bust cycle. Logic can disprove the latter, and the former is an irrational expectation. It is irrational to expect that any entity could create perfect stability in any market. Even full planning (i. e. pure and full socialism) could not cause a market to be perfectly stable. What the Federal Reserve has done is to make the market more stable than it would be otherwise. According to the following wikipedia article that lists all of the recssions in U. S. history (. http://en.wikipedia.org...) recessions are fewer and further between since the creation of the Federal Reserve. Since 1913 there have been 18 recessions (including depressions). That is an average of one recession about ever 5.388 years. Prior to 1913 there were 29 recessions, giving it an average of a recession every 4.344 years. The average length for recessions (number of years for each recession divided by the number of recessions) since 1913 has been approximately 1.11. The average length before 1913 was 2.05. These numbers show clearly that recessions have occurred less often since the Fed was created, and that the length of those recessions is almost half of those prior to its creation. Con also mentions that the Federal Reserve has "created" the boom and bust cycle. However, the boom and bust cycle has been a part of capitalism for as long as capitalism has been around. You cannot have capitalism without a boom and bust cycle. A governing entity could do things to make the cycle less severe (like create an entity similar to the Federal Reserve), but they could never fully get rid of it while retaining any degree of capitalism. We could assume that Con probably means that the Federal Reserve makes the boom and bust cycle more severe; or, through its practices, create bubbles where they would not otherwise exist. If this is the case, I hope that Con will expand upon this point in his second round of debate so that might more fully address it. ----------- Con closes with the claim that our system is currently not pure capitalism, and he implies that it is pure capitalism (or at least a more pure form of capitalism) is responsible for the rise in power of the U. S. economy. On the first point, Con is correct. We do not have, nor have we ever had, a purely capitalist system - and for good reason. Pure capitalism results in a huge gap between the rich and the middle class. It results in exploitation of the working class through poor working conditions and low wages. Pure capitalism allows for businesses to employ and exploit child labor. It allows businesses to manage their waste however they please, which means the cheapest method (read: large scale pollution). It also allows businesses to harm consumers. These are just a few of the major problems with pure capitalism. The Federal Reserve is not responsible for checking these practices, but the point is that pure capitalism is not ideal. On the second point, Con is very wrong. America's rise as a world economic power occurred after the First World War (1914 - 1918), but especially after the Second World War (1939 - 1945). What does this mean? This means that America's rise as an economic power took place AFTER the Federal Reserve (1913) was created.