It is a widely held view that despots in the Middle East and elsewhere did not meet Western standards in the protection of human rights – and so needed to be toppled. It is also the case that many now believe that unsettling the status quo has disturbed the fabric of society in many of these countries and has unleashed a force that results in political instability, civil unrest and even war.
Mustafa and his family didn’t understand their rights were being denied – life was hard but bearable. If they obeyed the law and didn’t step out of line they were fine. Attempting to raise living standards for all is an admirable goal but trying to foist Western mores on everybody is surely overstepping the mark.
The reaction to the Great Recession was to create a greater regulatory framework in order to curtail bad practices and protect consumers. At one level, this approach could not be opposed – at another level it was a dreadful overreaction and a shocking mistake. Excessive regulation stifles economic freedom and deprives consumers of opportunities to recover from financial setbacks.
It is not an exaggeration to suggest that economic success is dependent on vibrant financial markets. Therefore, if overly zealous regulation stifles market activity it follows that we cannot have economic success. MMPI fully accepts that the excesses of greed needed to be curbed. But now the regulatory overkill must be tackled.
It is too early to determine exactly what the electorates across the world are voting against. Some commentators suggest ordinary voters have been left behind and are expressing their frustration with the “elites” who seem to have done very well. MMPI believes it may be more fruitful to examine the regulations that were imposed and the austerity that was meted out to consumers. Driving interest rates to zero and into negative territory may prove to be the most disastrous regulatory decision ever made.
It seems that policymakers and dictators have at least one thing in common – their love of pendulum clocks! Their respective plumb lines are never contented with the vertical – they always have to swing to the extremes. We have heard it said many times that over the past several years what Ireland needed most was a dictator – one that would take no nonsense from anybody. Of course, pragmatism prevails when one realises that there is no such thing as a centrist dictator. Similarly with regulation! What was required were tighter rules in certain areas and a laissez-faire attitude elsewhere. This would have curtailed the unacceptable bits but encouraged the good stuff. Instead we got a one-size-fits-none austerity package that suffocated growth.
It has been a regular mantra of MMPI that “without growth there is no hope”. Japan has been smothered in a caustic deflationary environment for over 20 years. The same no-growth asphyxiation threatens to envelop Europe unless the shackles are loosened. The regulations have failed in their task. Is it now time for inflation to rise from the ashes?