The U.S. Federal Reserve Bank’s Chairwoman Ms. Yellen has recently called for more authority to intervene in markets during an economic downturn. Ms. Yellen understands that Central Banks need to have a larger role for purchasing any and all distressed assets in an economy.
The ability of a Central Bank to buy any assets can lead to a fair-market economy. Free markets are unpredictable in their boom-and-bust cycles. The poor get poorer; whereby, the wealthy actually gain from any market downturns. During a free-market downturn, the wealthy load up on cheap assets and just get richer during the following recovery. Conspiracy theorists would even claim that the top 1% cause these market downturns so that they can load up on the cheap. After all, these wealthy capitalists have a motive. The job of our Central Banking system is to promote the public interest and Central Banks should take on the role of creating a fair-market economy in which everyone prospers.
A fair market is a market wherein the value of a property or any asset is based on what an unpressured buyer would pay to an unpressured seller in the market. A fair market is when property changes hands between a willing buyer and a willing seller, neither being under any compulsion to buy nor to sell and both having reasonable knowledge of relevant facts.
The opposition is a free market. In a free market, capitalist forces are at work which lead to boom-and-bust cycles whereby market participants are forced to sell their assets in liquidations, foreclosures or to meet margin calls. In a market downturn, Central Banks should buy any distressed assets in the economy ensuring that noone is under any pressure nor compulsion to sell at a loss. A fair economy is an economy wherein noone loses.
A free market also allows wealthy capitalists to rip off the poor; on the other hand, a fair market protects consumers against capitalist greed. In a fair market, the Government has the role of ensuring the consumer is protected.
Free markets cause inequality. Inequality has never been higher! The gap between rich and poor has never been wider. According to faireconomy.org, this inequality has been intentional:
“In many cases, periods of economic growth have resulted in greater equality, as in the 1950-70s. Over the past few decades, however, the benefits of a growing economy have been concentrated in an extremely narrow elite at the very top.”
They go on to claim that the exclusion of people of color from the middle class was also intentional. “Federal programs for the middle class have been essentially unavailable to people of color.”
Obviously we have a huge challenge before us to correct these inequalities and to move toward a fair-market economy. Governments need to better recognize when their proposed policies pander to the privileged at the expense of the underprivileged. Only a wise Government can lead us to a fair-market economy by implementing policies which abolish Capitalism and hinder free-market forces.
The current Administration has gone a long way to correct the inequalities caused by former administrations. Under President Obama’s leadership, the U.S. has partially recovered from the damage done by Reaganomics and the Bush Dynasty. Our President was wise to promote Ms. Yellen to the position of Fed Chairwoman. He cited her understanding of the high “human costs” of unemployment when he nominated her to Chair the Federal Reserve. Ms. Yellen has proven her ability to connect economic theory to everyday life.
Governments and Central Banks (worldwide) need to better represent public interest by adopting pro-worker policies in place of pro-banker policies.
The USA, although a strong nation, cannot abolish economic inequality alone. Unfair markets are a global calamity and the problem needs to be resolved on a global scale. A fair market would put people and planet first. Hazardous energy sources like fossil fuels would be eliminated and green energies promoted. Under a capitalist, free-market system there is no incentive to implement nor repair infrastructure in minority neighborhoods. A fair market system would be inclusive for all. Ms. Clinton has called for a huge infrastructure investment and urged for aggressive spending on green energy.
Hillary Clinton has also said she wants an economy that works for everyone, not just those at the top. Ms. Clinton will provide a strong government hand for creating fair-paying jobs by simultaneously driving up wages. Governments and Central Banks (worldwide) need to better represent public interest by adopting pro-worker policies in place of pro-banker policies. Interest rates should be kept low to promote growth and to prioritize policies which promote full employment and rising wages.
How do we create a fair economy with fair markets? Everyone, especially the underprivileged, should receive a basic wage — a living wage at the low end and a maximum income at the high end. A fair plan is to increase minimum wages and to lower top earnings.
We have everything we need to build a fair economy: natural resources, skilled people, modern technology; however, often the money to finance our visions is lacking. In a fair economy, Central Banking takes on the role of providing financing for new ideas so that all market participants can fulfill their dreams. People would not have to rely on the privilege of family inheritance nor a valuable family equity to back a loan in order to finance their visions. The Central Bank should take on a larger role toward promoting growth in a fair-market economy by providing financing, not only for the privileged, but also for the disadvantaged.
International trade agreements make economies fair on a global scale. A stronger UN governance mandate for the World’s economies is needed as well. Obama has done so well leading the US, he is a natural candidate to lead the World Economy on a global scale. The UN along with the World’s Central Banks need to cooperate to create a global, fair-market economy.