It's time to crackdown on bent bankers, felonious financiers and shady stockbrokers

I thank Brian for his courtesy and forthrightness in this debate. It's been enjoyable. == Pro Inherency == 1) Capitalization down Brian's main argument here is that the banks are behaving recklessly which might result in more financial disasters and bailouts. We basically both agree on this point; the conflict is over what should be done about it. 2) Lending to Business Down He doesn't think fractional reserve banking is a problem, but doesn't explain what is wrong with my advocacy of non-fractional reserve banking. Non-fractional reserve banking involves the lender deferring resource-use till later so the borrower can use resources now. This deference is both symbolic (in terms of money), and real (in terms of resources). Fractional reserve banking is only symbolic, since new money is created without a proportionate trade in resource-use. Brian also did not address the effects of fractional reserve banking, which are summarized below: A) Asymmetric price increases distort rational economic calculation. The new money creates higher prices and therefore higher apparent profits in some industries, causing them to leech capital away from other sectors in the economy. When the market becomes saturated with credit, market prices start to readjust to reveal and "bust" the malinvestments made during the "boom" period. B) Extension of credit dilutes the purchasing power of all holders of money. As this continues, all market participants must borrow to keep up with rising prices. The result is mass indebtedness. C) Inflation effects the poor disproportionately since they are on fixed incomes and cannot invest in non-depreciating markets. Its basically a tax that only poor people pay. I'm opposed to taxing the poor. 3) Regulations Brian asserts that the tax proposals have been minor. My source showed a 50% tax on bonuses, which is pretty significant. Regardless, his plan to cap bonuses and dividends does not solve the fundamental problems of the system. It will still be the same fractional reserve monopoly banking system run by the same group of good ol' boys. The basic thing Brian wants out of financial groups is more lending to smaller companies. Under non-fractional reserve banking, if small businesses profitable, they will be able to get loans. There will be less reckless gambling by financial groups because you can't print up a bunch of gold. == Con Counterplan == Brian points out that the introduction of commodity currency might cause existing financial systems to collapse. First, the anticipation of this will lead our banks to clean up their acts BECAUSE they don't want to go bankrupt. Second, even if they do all fail, the transition to commodity currency could be painful at first, but very beneficial in the long run. The plan to keep existing banks in business by any means necessary simply imposes the costs of their greed and ineptness on the general public. At any rate, we both agree that the competition of commodity currency would stimulate the financial market. I extend that commodity currency would be better for the general population because it is a stable stock of value and stabilizes the economy by eliminating fractional reserve banking. == Summary == Brian and I both agree we need to crack down on bankers. He wants to impose a new law that will limit their ability to pay themselves, but still keep the existing infrastructure in place. I want to get rid of two laws that will revolutionize the whole financial sector and impose real accountability on banks for the benefit of consumers. END THE FED http://tinyurl.com...