Comments by "Tony Wilson" (@tonywilson4713) on "Should the Federal Reserve Be Abolished? Featuring Prof. Richard Wolff" video.

I really like Prof Wolff, because he's at the very least giving an educated alternative opinion on economics, but there are times he lets brain take it too far. To call Capitalism unstable is to ignore what the terms stable and unstable actually mean. I'm an engineer and we have to learn and understand what stable and unstable actually mean because otherwise the modern world can't exist. Power stations and the power grid wont work, your car wont work and airplanes will tear themselves apart mid-air- that kind of stuff. Sorry this is a longish explanation. This is basic high school science level. Something that is naturally stable is something that will self correct from a disturbance. An example of stable system is a ball in a bowl. If you bump the bowl and the ball moves, it will eventually settle back down to the bottom of the bowl. An unstable system will not recover from a disturbance. If you balance a broom stick on its end. Any disturbance and it will just fall over. HOWEVER if we stand the broom stick upright on our hand and move our hand to correct for disturbances you then have something not entirely stable or unstable. We call that "artificially stable," as in there is something else keeping the system in a stable state. In engineering we have many systems that are artificially stable and quite often there's a combination of stabilisers. The suspension in your car has shock absorbers that allow you to hit bumps and not have the suspension bounce around. There's also the tires and suspension geometry. A main part of it is the drivers brain which makes corrections like steering inputs. One of the incredibly important concepts of artificially stable systems is that the stabilisers have limits and if you exceed those limits the system can break or fail. If 1 of the shock absorbers fails and reduces the cars stability. If the car hits a big enough bump and shock absorbers reach their limit. IF driver's brain cannot compensate then the car crashes. Modern capitalist systems are "artificially stable." There are shock absorbers and adjustments that governments use to keep there economies stable. Part of that system are interest rates, but there's also government spending (via policies and projects), the rate at which they print new money, bond rates and the regulations they place on private industry (like banking rules). The real problem is we are now bumping into the limits that our economic stabilisers can handle.
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That's a really good point, that goes a lot further than just the Fed. And the same can be asked of almost any country, it just might NOT be as "in your face" obvious as America.
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I really like Prof Wolff, because he's at the very least giving an educated alternative opinion on economics, but there are times he lets brain take it too far. To call Capitalism unstable is to ignore what the terms stable and unstable actually mean. I'm an engineer and we have to learn and understand what stable and unstable actually mean because otherwise the modern world can't exist. Power stations and the power grid wont work, your car wont work and airplanes will tear themselves apart mid-air- that kind of stuff. Sorry this is a longish explanation. This is basic high school science level. Something that is naturally stable is something that will self correct from a disturbance. An example of stable system is a ball in a bowl. If you bump the bowl and the ball moves, it will eventually settle back down to the bottom of the bowl. An unstable system will not recover from a disturbance. If you balance a broom stick on its end. Any disturbance and it will just fall over. HOWEVER if we stand the broom stick upright on our hand and move our hand to correct for disturbances you then have something not entirely stable or unstable. We call that "artificially stable," as in there is something else keeping the system in a stable state. In engineering we have many systems that are artificially stable and quite often there's a combination of stabilisers. The suspension in your car has shock absorbers that allow you to hit bumps and not have the suspension bounce around. There's also the tires and suspension geometry. A main part of it is the drivers brain which makes corrections like steering inputs. One of the incredibly important concepts of artificially stable systems is that the stabilisers have limits and if you exceed those limits the system can break or fail. If 1 of the shock absorbers fails and reduces the cars stability. If the car hits a big enough bump and shock absorbers reach their limit. IF driver's brain cannot compensate then the car crashes. Modern capitalist systems are "artificially stable." There are shock absorbers and adjustments that governments use to keep there economies stable. Part of that system are interest rates, but there's also government spending (via policies and projects), the rate at which they print new money, bond rates and the regulations they place on private industry (like banking rules). The real problem is we are now bumping into the limits that our economic stabilisers can handle.
1