The logic of a bureaucratic regulator

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.

Take this nugget of bureaucratic regulatory logic:

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.

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9 Responses to The logic of a bureaucratic regulator

  1. H B Bear

    When money is free people treat it like free money?

  2. Bruce of Newcastle

    Here’s another idea.

    The irony is the Left in the US is practicing stimulus in its most basic form, by defunding policing. Whereupon all those laws they brought in to regulate everything from plastic straws to nature strips are now unenforceable. The people are increasingly just ignoring them, and with no police they can’t be enforced anyway.

    Good luck repealing any of the regulations and laws though. They’ll die in a ditch before allowing the least of them to be gotten rid of.

  3. duncanm

    all the way down to council level, as noted here recently.

    NSW government and Sydney council lock down the CBD after-hours trading due to a couple of violent incidents lack of policing. Nightlife shuts down.

    Solution? Hire a well-paid “24 Hour Economy Commissioner” to work out how to regulate business back into life.

  4. Up The Workers!

    “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.”

    Isn’t this exactly the same rationale we are following with respect to cigarette smoking/victims and pushers?

    The Misgovernment legalises the sale and peddling of lethal nicotine products to the healthy and then savagely punishes the poor addicts and victims with extortionate taxes and penalties while jumping into bed with the lethal pushers, drug-peddlers and manufacturers for their stimulating effect on the economy.

  5. Colonel Crispin Berka

    Rumour going around teh intarwebs that the central banks are planning to roll out their own cryptocurrencies (timeframe unknown). How would this be net beneficial to central banks and is it likely?

  6. Suburban Boy

    Quoting Roberts CJ is timely.

    He has just wandered even further off reservation than usual and made Barrett’s appointment to SCOTUS potentially critical to the election outcome: https://legalinsurrection.com/2020/10/scotus-john-roberts-joins-liberals-to-permit-pa-to-count-non-postmarked-ballots-3-days-after-election-day/

  7. covid ate my homework

    The purpose of central banks is not to protect us but to socialize the irresponsibility of the anointed. Let’s remember what catalyzed GFC 1, a bank refused to accept another banks paper.

    Covid is not a problem for almost everyone. It’s not about the Flu, it’s about the masking (pun intended) of GFC 2.

    Repo markets began to collapse in Nov, Dec 2019, billions/trillions pumped in by US fed and all others to prop up markets but bad bets mount daily, what to do?

    Oz reserve pumped in 8.8b as recently April 20. They’re not covering my stupid bets, look to the four pillars, who else would be so irresponsible.

    It’s just my conspiracy theory.

  8. flyingduk

    Rumour going around teh intarwebs that the central banks are planning to roll out their own cryptocurrencies (timeframe unknown). How would this be net beneficial to central banks and is it likely?

    More likely that National Governments will do this, and bypass the Central Banks entirely. The current ‘monetary system’ is a convoluted mess of Govt issuing a bond, retail banks buying the bond, retail bank onselling the bond to the RBA, RBA paying for that with newly printed money. It is structured thus deliberately, to maintain the fiction that there is a ‘separation of money and state’ and to disguise the fact that National Governments just print the stuff, in every increasing quantities, nowadays, and there is never going to be any attempt to ‘unprint’ it in the future. The new benefit to Govt in issuing their own digital cryptocurrency is that every unit of it will be traceable and controllable in real time: smoking too much? – new ciggy payment denied, exceed the speed limit? – fine deducted automatically, attend an ‘Anti-Dan’ rally – all your money is devalued 20%, belong to a favoured group (say, disabled lesbian of colour) – direct credit of money into your digital wallet, belong to the patriachy? – 20% fine imposed on all your money, and what you have left is only allowed to be spent in approved ways, and at 1/2 value. You get the drift?

    Buy guns, gold and bitcoin, while you still can, and do it with cash, before its gone.

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