US Supreme Court Chief Justice John Roberts once wrote:
The way to stop discrimination on the basis of race is to stop discriminating on the basis of race.
But if politicians, bureaucrats and regulators stop trying to pass laws and regulations to correct the adverse consequences of their previously passed laws and regulations, what will they do? Would they need to get, you know, productive jobs? From whatever productive jobs are left after their laws and regulations have destroyed hunks and chunks of the productive economy.
Senior (US) Federal Reserve officials are calling for tougher financial regulation to prevent the US central bank’s low interest-rate policies from giving rise to excessive risk-taking and asset bubbles in the markets.
Only no-skin in the game government officials could come up with this.
So lets get this right. The US Central Bank manipulates interest rates so that they are record low and they now want to regulate so that people don’t engage in the activities that low interest rates are meant to stimulate.
Here’s another idea. Let the police distribute narcotics because it would provide the necessary stimulus in police employment. But then, let’s increase the penalties for holding or using narcotics.
Genius. Just genius.
It also highlights fears at the Fed that the financial system remains vulnerable to new shocks, despite massive central bank intervention this year to stabilise markets and the economy during the pandemic.
Except the purpose of the “massive central bank intervention” was to encourage leverage. Would not regulation just counter the essential policy purpose being pursued?
If the tools don’t work, don’t use them. But if they didn’t use them, they wouldn’t have jobs. So let’s use the tools and then make some more tools. Talk about to a hammer everything being a nail.
In the old language, this would be called Central Planning. But allegedly we have “free markets” and hence there is no central planning. Even by those genius technocrats who sit around and control the price of money which in turn impacts the price of everything else.
There needs to be truth in nomenklature.
They aren’t central banks. They are central commissariats.
They aren’t central bankers. They are central planners.