Fed Demands More Power

So apparently Ben Bernanke is demanding additional powers to regulate (that is, dictate and see his will enforced at gunpoint against his victims).  Jammiewearingfool writes about this today:

Federal Reserve Chairman Ben Bernanke said Tuesday that the Fed should have additional powers to prevent and limit financial market turmoil.

Classic.  When has a government regulator ever said that their agency should have less power, or admitted that their agency has caused problems?

Jammie’s concession is:

I am in favor of this suggestion by Bernanke. Over the years, the financial markets have changed, become more complex…

Classic.  When has a blind elephant ever opposed the idea of dictatorship in principle?  It’s just that a free market is more efficient, or that this particular gang wouldn’t be the right one to manage it, or …

So let me get this straight Jammie, the complexity of financial markets is a good reason to give it over to the control over a single agency?  Because economic dictators are much smarter and always place better bets that the myriad of private decisions would be?  Because subjecting our financial system to the political process of crooks and liars like Obama and McCain and Schumer and Conyers would be a Good Thing???

Isn’t the current problem with mortgage lending evidence enough that banking needs to be deregulated?  In the 1990’s, regulators wanted to appease the race pimps who argued that banks were not extending credit to those who “needed” it most.  Regulators approached the banks the way they always do.  They had a stick: the threat of regulatory powers they could wield.  And they had a carrot.  Loot taken by force from taxpayers.

It was all fun and games until the bubble inevitably burst.

Today, we see government employee pension funds unwisely invested in high-risk investments and receiving below-market returns.  Many see this, too, as a call for more regulation.  But I have a few questions about what a regulator can actually do:

  1. make an incompetent fool into a competent manager?
  2. make a dishonest crook into an honest man?
  3. give omniscience or omnipotence to managers?
  4. be omniscient or omnipotent itself?

The reality is somewhat sordid:

  1. cater to special interest groups
  2. distort markets
  3. pretend to omniscience
  4. cause unintended consequences
  5. politicize private property and capital ownership
  6. demoralize and discourage honest managers
  7. create a myriad of opportunities for shady operators like Tony Rezko and Michelle Obama
  8. prevent value from being created

Forget “conservative” and “liberal” labels for a second.  I think the proper lines of demarcation are:

A) Those who want to take from others by force and compel them by force

B) Those who do not want to be taken from, or compelled



The government’s pressure on banks to lend to undeserving borrowers began earlier than I thought.  Walter Williams wrote recently that the Community Reinvestment Act of 1977 was enacted in, naturally, 1977.


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