Additional layers of regulations
Back when I was in the Israeli Command and Staff college a friend of mine wrote a paper about temporary units - units that were built to solve a particular problem. Not surprisingly those units stayed active long after the problem they were suppose to solve disappeared. While working on the paper he found a story, which unfortunately I couldn’t find since, about the British army. The story is that for many years the artillery batteries kept the position of a soldier that gourd the horses, although they were fully mechanized. The story about the British army might be a legend, but many similar stories are not. This is how in Belgium the central bank still employs 2000 people although it has no currency to oversee since 1999 and this is why we will always read about demands for budget increase and never the opposite.
This should add to the skepticism about the wisdom of the new regulatory initiative of the Treasury Secretary. At the end of the long regulatory process we will end up with new set of regulations and government agencies on top of these that we already have - not instead of them. Obviously when the banks protecting themselves from bad business practices by requesting the government to bail them out they are inviting more oversight. However the answer was to decline the bailout, not to add more regulations.
Tags: Bureaucracy, Regulations, The Free MarketRelated posts
Rogel @ April 1, 2008