Art, I'm champing at the bit! But will answer your post over here so Ramsey doesn't get the horsewhip out.
Alan Green$pan and Mr Rubin don't have competition in the USA. Their currency is a monopoly [for now]. So it isn't at all clear that they are doing a great job. My bet is that encrypted cybermoney is going to do them in [unless the USA can put the kibosh on it by using brute force - the fallback position of the inadequate]. Then we'll see which is the best currency and who is the best currency manager - the 'independent' regulator or the free market.
The New Paradigm does not owe success to Alan Green$pan. Alan's job has been to milk it for all he's worth. He is extracting trillions from it!! The USA deficit and cash flow shortage is disappearing faster than snow in spring in Canada. That's thanks to Microsoft, Qualcomm and their ilk.
Regulators should be and are a function of the political system. They are appointed by politicians who are voted for by people who are happy to vote for other people's money to get taken and given to their interests. That's fine unless you are the minority who doesn't get the goodies but provides the dosh. For example, being a negro in the south during segregation was not much fun, despite the great and wonderful USA constitution.
The USA constitution is not a great regulatory piece of work. Sure, it is better than other countries in many respects, but having a regulator versus regulator competition and winning it is not a demonstration of how great regulation is.
Your central point seems to be that the regulatory approach gives longer term good judgement than private investment decisions. I disagree. My time horizon is measured in many decades [I have my own life and my children's to keep on the rails, not to mention wider interest in keeping all on the rails because our family depends on it] and beyond my expected survival time. Regulators have a very short point of view. They want to keep their jobs. The politicians who appoint them are concerned about making it past the next election or even the next week, or even the next 24 hours. They'll sacrifice anything to maintain their power [check out Hitler's end and the surrounding mayhem for a most extreme example].
Tribal dominance hierarchies are an endangered species. Independent regulators are not independent and neither should they be. If they were truly independent, they would in fact be the government. The USA constitution does not set Alan Green$pan on the same level as Congress, the Senate, The President or the Judiciary. [I'm making this up as I go so maybe I'm wrong there]. He is not independent. Any time they like, one of that group [I don't know which it is - maybe it is two of them] can reel him in, sack him, change the regulations and do any damn thing they please to satisfy mob rule [= democracy].
What governments do and I'm glad of it is protect private property, people, enforce contracts, punish fraud and allocate communal resources such as spectrum, oceans, skies. The rest of regulation is in the realm of medieval confiscation, bossiness, fascism, communism [state owned roads are communist roads as one example] and does not help in the greatest happiness for the greatest number.
Since governments all overstep the primary need for them into generalized confiscation and bullying, 'IT' will provide a haven for people to flee to. The main business of government over the next few decades will be to try to stop the great escape into encrypted cyberspace.
IT will be calling people with a greater attraction than the Statue of Liberty did earlier this century.
That's the theory for today.
Mqurice
<To: John Biddle who wrote (840)
From: Art Bechhoefer Saturday, Aug 14 1999 10:54AM ET
Respond to Post # 845 of 848
John, if we take your view that government bureaucrats can't do anything right, particularly in regulatory policy, then Alan Greenspan and Secretary Rubin must have been making regulatory decisions on the economy at random, and it just happened that they turned out to be the right ones. When it comes to making decisions about CDMA, anybody who cared, and who had enough understanding about digital communications, could easily have studied the CDMA patents assigned to QUALCOMM, or could have read the textbook co-authored by Irwin Jacobs many years earlier. A reasonably prudent person, and particularly, a scientist or engineer working at a major telecommunications hardware company would have been able to figure out that this CDMA stuff was better than anything else, including GSM, TDMA, or worse, plain old analog cellular. Companies, even though they can see the handwriting on the wall, will often make decisions that maximize short term profits and delay major capital investments in new technology until there are no other alternatives. This is what I call "short term" decisionmaking, and it is precisely the sort of decisionmaking that independent regulators can guard against because they are not, or should not be oriented to short run solutions.
I agree with you on one point. It is rare that we get regulators with the skill of a Rubin or a Greenspan. Most get their jobs, not because of their skills but because they know the right people. When you get regulators of the typical sort that frequent government regulatory agencies, you are entitled to the view that they are inept and incapable of doing a good job. But the point I am making is that if a system does not corrupt itself with incompetent people, the indepenedent loop provided by unbiased regulation becomes a valuable factor ensuring well formed, long range decisions of better quality than would occur without any independent regulation. If you want to go into the theory behind this, take a look at one of the last lectures of John von Neumann, given about 1957, with a title something close to "The Design of Reliable Systems from Unreliable Components." And if you want a great example of a regulated system, you need go no further than the U.S. Constitution.> |
