You're just dropping slogans. Please reply substantially on why you seem to think communities like American Samoa would be better off if its people couldn't get bank loans.
>> lease reply substantially on why you seem to think communities like American Samoa would be better off if its people couldn't get bank loans.
> I'd think it's obvious that they can't invest their money profitably if you don't let them do that.
I don't think you're really wrapping your head around the situation. No one's saying they "can't invest their money profitably." What's being said is that it's better for their community if their community's money is deposited in a local bank that makes loans to the community, rather than an international bank that won't (and perhaps pay slightly more in interest).
If you're having trouble wrapping your head around terms like "better for their community," you may have an easier time if you roughly translate it to "more profitable for their community."
You're confusing putting money in motion with actual production. If people don't invest locally, wages will fall until they've fallen enough that it's profitable to invest locally. There's no scenario in which investment dries up.
Now, in order for economic health, the investments made have to be put towards doing useful things. Ideally, very useful things.
(Edit: Notably, you can't invest locally if you don't have any profits to invest.)
Difficult to understand how people can still think like this. This is complete nonsense. Look around. The USA and Europe are littered with economic ghost towns where the disappearance of factories and industry sent the community into an economic death spiral from which they won't ever recover. Simplistic models like this have no bearing on the real world.
> If people don't invest locally, wages will fall until they've fallen enough that it's profitable to invest locally.
The problem with toy economic models like yours is that they're toys, and the elide many important factors in the name of simplicity. That simplicity can be extremely intellectually compelling, especially for laymen, but at the end of the day the world is complex and if you ignore that you have bad policy.
When all you have is a hammer, every problem looks like a nail. The solution to market failures is not more and harder market.
> There's no scenario in which investment dries up.
The literal facts are against you. The banks withdrew and American Samoans have no access to credit outside of usurious backyard moneylenders.
> Now, in order for economic health, the investments made have to be put towards doing useful things. Ideally, very useful things.
What at all does this have to do with anything under discussion? Usefulness is a local function and the precise problem here is that American Samoans (and others) don't have access to the credit they need do useful things in their communities. I'll bet you money that they're not planning to take out loans to do useless things like dig and fill in holes.
Anyway, I think we're talking past each other, and you seem more interested in performing dogma.
This thread is in response to your post about "prohibiting American Samoans from putting their money in the international bank," not about the current banking situation.
Again, I said that sounds like it could be a reasonable trade-off. You have to balance...
1. the good of the theoretical possibility of getting a pittance more in interest from an international bank with
2. the social costs of not having a well-regulated local bank that will make loans in the community.
If you totally ignore #2, you're going to make a bad policy decision. I think that's approximately what you're doing.
My position is if the good from #2 is greater than the good from #1, discouraging community members from depositing their money in a distant bank over a local one is good policy.
