Whenever central planners start to feel the heat, a very popular pacifier that they fall back on goes by the name of “rules”.
Now that the The Federal Reserve genie has been released from the bottle (thank you Ron Paul) it has a hard time dealing with all the light that is shined upon it. How much easier it was to hide in the darkness. These days, regular people know who Ben Bernanke and Janet Yellen are. They may not fully understand exactly what they do, but they’ve heard the names, and can associate them with things like “print money”. What a huge first step.
The central planners must now compete in winning the war of ideas. The genie cannot go back into the bottle, so maintaining a control on what ideas dominate is the battle that the planners have been forced to fight.
Granted, the planners still have great advantages in maintaining their hold, with their “schools” and mainstream “media;” but something much more powerful called the Internet was born just a few short decades ago. The environment for the blossoming ideas of Liberty have never been more propitious.
And what a serendipitous time for the Internet to be born. A time when the planners are saddled with the largest Welfare/Warfare state in the history of the world. It’s so large, and so sprawling, that no one can get a handle on it. It’s still very good at destroying things (foreign countries), ruining lives, and hassling citizens to the Nth degree. But we are at the stage where control of the monster has been lost.
The best way that the planners can cope is with patchwork band-aids. Oil the squeakiest wheel. Make the sharpest pain go away somehow. The problem that they face is economic. A point will inevitably be reached when the economics can no longer be sustained (think Soviet Union). At that point, everything is a squeeky wheel. Everything is a sharp pain.
But until that point, the political class can still live very rich and luxurious lives (see DC and Virginia), and can continue to use the band-aid technique to pacify the public.
The current band-aid for pacifying the public in regards to The Federal Reserve is something called a “rules-based” Fed. In other words, the central planners need to adopt strict “rules” and stick to them.
Here are some examples:
“My concern with Ms. Yellen is whether she will abide by clear monetary rules as the central bank puts an end to extraordinary quantitative easing and related interventions in the financial markets.” - Larry Kudlow
“A third way to constrain central bank actions is to direct the monetary authority to conduct policy in a systematic, rule-like manner.” – Charles Plosser, Fed Bank of Philadelphia
It’s very ironic to hear such tripe in the land of the free. For there is a list of supposed rules called the U.S. Constitution that has been ignored so thoroughly that the American public barely knows of its existence.
Mankind’s history is polluted with governments making rules (to gain legitimacy, and to keep the public at bay) only to shatter those rules into pieces. The U.S. government is not unique in this respect. It’s built into the nature of the power-hungry. The lust for power can not be held back by rules. The only rule to hold it back is to not grant the power.
This should not be a surprise to people who have even some semblance of a moral compass. After all, people in government “legally” rob, steal, and kill as a matter of practice. Do such individuals deserve to be believed when they create “rules”?
Why not instead believe those who are peaceful?
Not only have governments throughout history proved (without a question of a doubt) that “rules” are meaningless and only a pacifier, but it’s safe to say enough experience has proven that central planning does not work. Hundreds of millions have died at the hands of central planners.
In addition to such horrific experience, there now exists a large body of thought that deduces why such planners must always fail. Giant thinkers like Ludwig Von Mises and Murray Rothbard did the heavy lifting (i.e., thinking) and have left behind the keys to the castle of peace.
In the final analysis, “rules” that are setup by planners will (A) be broken at their earliest convenience, and (B) will fail to accomplish the impossible goal of making central planning work.
Do not fall for the “rules” band-aid.
It is designed to make you go away and leave the planners alone.
Reprinted with permission from Economic Policy Journal.