It looks obvious

Federal Reserve Chairman Ben Bernanke quest for more power to centrally control the market make sense because the Federal Reserve is such a phenomenal success. Like any bureaucrat, Bernanke is seeking to increase its organization, despite evidences that might suggest the opposite approach. What makes this worse is that we are being requested to hand more authorities, backed by the coercion power of the state to an organization that is not controlled by the state (and claiming that it is not for profit is euphemism for great power and profit to its board members….):

Congress should consider giving the Fed power to set standards for capital liquidity holdings and risk management for investment banks, as it now does for commercial banks, Bernanke said. Already, the Fed has offered to be the lender of last resort for the investment banks.

[...]

“This is the first time I ever recall the Fed coming out and arguing that it needs to have expanded oversight and responsibilities,” said former Fed official Robert Eisenbeis in comments to Bloomberg television.

I thought that the new chairman can’t be worse than Greenspan, who sold his soul in exchange of power , but apparently Bernanke proves me wrong.

This is almost as good as the claim that paying taxes is voluntary:

“I’m not here to say that the government is always right, but when the government tells you to do something, I’m sure you would all agree that I think you all recognize that is something you need to do.”

I guess we really did something bad to deserve these representatives…

Paul Krugman present a very appealing case against those who call for deregulations:

Lately, however, there always seems to be at least one food-safety crisis in the headlines — tainted spinach, poisonous peanut butter and, currently, the attack of the killer tomatoes. The declining credibility of U.S. food regulation has even led to a foreign-policy crisis: there have been mass demonstrations in South Korea protesting the pro-American prime minister’s decision to allow imports of U.S. beef, banned after mad cow disease was detected in 2003.

How did America find itself back in The Jungle?

It started with ideology. Hard-core American conservatives have long idealized the Gilded Age, regarding everything that followed — not just the New Deal, but even the Progressive Era — as a great diversion from the true path of capitalism.

Or in simple words - Free Market Economy is damaging force on civilized modern societies and it can cause increase in deaths because of lack in government oversight that will leave the field for greedy corporations. This would be a great argument if only it had any base in actual facts, but why bother?

What we see is a lot of variability from year to year but a net downward trend. You can also look at cases per year which are more variable but also show a net downward trend. No evidence whatsoever that we are back “in The Jungle.”

A british fighter pilot stationed in Afghanistan demonstrated courage and fighting spirit that would would make the RAF pilots from WWII proud, as well as the handlebar club…

Flight Lieutenant Chris Ball, who is on an exchange posting with the USAF in Afghanistan was told to trim his distinctive moustache.

The pilot, who is usually based at RAF Lossiemouth, turned to the Queen’s Regulations and found the moustache’s width did not breach RAF guidelines.

The rules state the moustache should not go below the edge of the mouth.

[...]

The USAF relented and Flt Lt Ball’s moustache was left unruffled.

And now to the the rest of the news…

The FCC is a regular target here and its provides many examples for how bad the regulatory monster in DC has become. Reason magazine, in its July print edition has a very good article which demonstrate, through the example of the FCC, the fundamental problems with the regulatory system we created:

The commission is corrupt. I don’t just mean the sort of corruption where the chairman loosens his tie, puts his feet up on his desk, and doles out favors to the companies that scratched the right backs—though you’ll find plenty of that in the commission’s history. Even when the body is being relatively transparent and above-board, it is beholden to politically connected lobbies. The FCC controls an important economic resource. Naturally, important economic interests try their best to influence its decisions.

The most flagrant example of this might be the welcome the commission gave to FM radio. The technology was an enormous leap forward: It allowed stations to broadcast without static, and it allowed more signals to coexist on the spectrum. It also worried RCA, which was investing heavily in the development of television; the company fretted that consumers might not pay for both a new FM radio and a new TV set. RCA didn’t control the patent on FM, so it pressured the FCC to favor the other technology. The regulators obliged, and a series of roadblocks appeared in FM’s path. The most destructive decision came in 1944, when the commissioners suddenly reassigned the FM broadcasters’ portion of the ether to television, instantly rendering every FM receiver obsolete.

[...]

The commission is sanctimonious. For seven decades, the nation’s scolds and censors have used the FCC as a tool to shape the sounds and images allowed on the airwaves. In 1952, for example, then-commissioner Paul Walker announced with satisfaction that his agency had “surveyed the programming of some of the television stations in operation, and found that some of them had reported no time devoted to broadcasts of a religious nature. We felt in view of this fact that regular renewal of their licenses would not be in the public interest.” The stations quickly revised their schedules, and the commission agreed to renew their licenses after all.

[...]

The commission is technocratic. The next time someone tells you central planning is dead, remind him that there is an arm of the federal government that decides in advance how different chunks of the electromagnetic spectrum will be used, and that it also reserves the right to determine which entities will be allowed to use it. It’s true the commission has adopted several market “mechanisms” in the last few decades: FCC-approved broadcasters now have the right to sell their licenses to other FCC-approved broadcasters, and spectrum is usually distributed by auction rather than pure fiat. But even an auction can be bent to the planners’ will.

And if we talking about the FCC I can only repeat my recommendation about the book: Law and Disorder in Cyberspace: Abolish the FCC and Let Common Law Rule the Telecosm.

The few readers of this blog already know that I hold quite an extreme position on government regulating social affairs. I don’t think that the government should regulate, for example, who should a corporation hire or not, what will be the compensation and many other issues. One exception for this rule is, obviously, the government. Government regulations administrating its own affairs must be enforced.

But surprisingly, instead of being the only one subject to its own regulation - it is the only one exempt from them.

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.

When it is more important to win regulatory favors than winning consumers where would the money be invested?

While Senator McCain is busy convincing GOP voters that he is true conservative, a term that need clarification to begin with, I stumble upon a news report that demonstrates McCain’s conservative credentials. Apparently Senator McCain, in his roll of senior good doer, was successful in forming a new federal agency - this time to regulate the sport of Boxing. Additional government agencies, regulations and barriers are typical McCain approach for solving issues passing his desk.

The move is part of a campaign to protect youngsters coming into the sport, the actions of promoters and the independence of judges. Among a range of schemes to be introduced will be a new licensing system applying to boxers, managers, promoters and sanctioning bodies.

The new agency – the US Boxing Administration – will also regulate the major TV networks when they act as fight promoters.

The bill was the brainchild of Senator John McCain, a long time supporter of reform in the sport.

No wonder Goldwater didn’t like him…

The latest consumer protection, the French version, is so typical - the consumer has to pay more in the name of competition:

Amazon.com may not offer free delivery on books in France, the high court in Versailles has ruled. 
The action, brought in January 2004 by the French Booksellers’ Union (Syndicat de la librairie française), accused Amazon of offering illegal discounts on books and even of selling some books below cost.

The court gave Amazon 10 days to start charging for the delivery of books, which should at least allow the company to maintain the offer through the end-of-year gift-giving season. After that, it must pay a fine of €1,000 (US$1,470) per day that it continues to offer free delivery. It must also pay €100,000 in compensation to the booksellers’ union.

Retail prices, particularly of books, are tightly regulated in France.

It is one step forward two step back with france