We need a credit system that runs credit flow rates independent of changes
in expected default risk
In fact we prolly want credit flows to rise where they now slow
and slow where they now rise
Ie
Run Exactly the opposite of the change in rates
Produced by the " for private profit "guided Institutions
that predominant in our existing credit system
The use of the policy rate
to produce or better induce
this countercyclical flow speed
Fails because default is a qualitative break
In the rationing system which operates independently of the interest charge
Like tuition and admittance to harvard
The interest rate is not used as a means of selection anymore then tuition is
The means to regulate the size of the harvard freshman class
Both jobs and credit are ration systems
that select hires and borrowers
independently of accompanying interest charges
or wage rates
