Best of the Week
Most Popular
1. Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH! - 9th Sep 21
2.Tech Stocks Bubble Valuations 2000 vs 2021 - 25th Sep 21
3.Stock Market FOMO Going into Crash Season - 8th Oct 21
4.Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
7.AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
8.Why Silver Price Could Crash by 20%! - 5th Oct 21
9.Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
10.Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Last 7 days
Stock Market Trend Forecast Early 2022 - Tech Growth Value Stocks Rotation - 18th Jan 22
Stock Market Sentiment Speaks: Are We Setting Up For A 'Mini-Crash'? - 18th Jan 22
Mobile Sports Betting is on a rise: Here’s why - 18th Jan 22
Exponential AI Stocks Mega-trend - 17th Jan 22
THE NEXT BITCOIN - 17th Jan 22
Gold Price Predictions for 2022 - 17th Jan 22
How Do Debt Relief Services Work To Reduce The Amount You Owe? - 17th Jan 22
RIVIAN IPO Illustrates We are in the Mother of all Stock Market Bubbles - 16th Jan 22
All Market Eyes on Copper - 16th Jan 22
The US Dollar Had a Slip-Up, but Gold Turned a Blind Eye to It - 16th Jan 22
A Stock Market Top for the Ages - 16th Jan 22
FREETRADE - Stock Investing Platform, the Good, Bad and Ugly Review, Free Shares, Cancelled Orders - 15th Jan 22
WD 14tb My Book External Drive Unboxing, Testing and Benchmark Performance Amazon Buy Review - 15th Jan 22
Toyland Ferris Wheel Birthday Fun at Gulliver's Rother Valley UK Theme Park 2022 - 15th Jan 22
What You Should Know About a TailoredPay High Risk Merchant Account - 15th Jan 22
Best Metaverse Tech Stocks Investing for 2022 and Beyond - 14th Jan 22
Gold Price Lagging Inflation - 14th Jan 22
Get Your Startup Idea Up And Running With These 7 Tips - 14th Jan 22
What Happens When Your Flight Gets Cancelled in the UK? - 14th Jan 22
How to Profit from 2022’s Biggest Trend Reversal - 11th Jan 22
Stock Market Sentiment Speaks: Are We Ready To Drop To 4400SPX? - 11th Jan 22
What's the Role of an Affiliate Marketer? - 11th Jan 22
Essential Things To Know Before You Set Up A Limited Liability Company - 11th Jan 22
NVIDIA THE KING OF THE METAVERSE! - 10th Jan 22
Fiscal and Monetary Cliffs Have Arrived - 10th Jan 22
The Meteoric Rise of Investing in Trading Cards - 10th Jan 22
IBM The REAL Quantum Metaverse STOCK! - 9th Jan 22
WARNING Failing NVME2 M2 SSD Drives Can Prevent Systems From Booting - Corsair MP600 - 9th Jan 22
The Fed’s inflated cake and a ‘quant’ of history - 9th Jan 22
NVME M2 SSD FAILURE WARNING Signs - Corsair MP600 1tb Drive - 9th Jan 22
Meadowhall Sheffield Christmas Lights 2021 Shopping - Before the Switch on - 9th Jan 22
How Does Insurance Work In Europe? Find Out Here - 9th Jan 22
MATTERPORT (MTTR) - DIGITIZING THE REAL WORLD - METAVERSE INVESTING 2022 - 7th Jan 22
Effect of Deflation On The Gold Price - 7th Jan 22
Stock Market 2022 Requires Different Strategies For Traders/Investors - 7th Jan 22
Old Man Winter Will Stimulate Natural Gas and Heating Oil Demand - 7th Jan 22
Is The Lazy Stock Market Bull Strategy Worth Considering? - 7th Jan 22
METAVERSE - NEW LIFE FOR SONY AGEING GAMING GIANT? - 6th Jan 2022
What Elliott Waves Show for Asia Pacific Stock and Financial Markets 2022 - 6th Jan 2022
Why You Should Register Your Company - 6th Jan 2022
4 Ways to Invest in Silver for 2022 - 6th Jan 2022
UNITY (U) - Metaverse Stock Analysis Investing for 2022 and Beyond - 5th Jan 2022
Stock Market Staving Off Risk-Off - 5th Jan 2022
Gold and Silver Still Hungover After New Year’s Eve - 5th Jan 2022
S&P 500 In an Uncharted Territory, But Is Sky the Limit? - 5th Jan 2022

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

U.S. Presidential Election 2012: Forget Bailouts, We Need a Shakeout

ElectionOracle / US Presidential Election 2012 May 23, 2012 - 06:47 AM GMT

By: Money_Morning

ElectionOracle

Best Financial Markets Analysis ArticleKeith Fitz-Gerald writes: The markets rallied Monday on news that global leaders favor additional stimulus. The hope is that additional spending will induce growth and put the world back on track.

Don't hold your breath.


Big government robs the economy of wealth, strips it of initiative and further undermines our recovery.

So why, then, do our leaders continue to throw good money after bad?

Try this on for size.

In 1958, a man named Cyril Northcote Parkinson published a series of essays in book form called Parkinson's Law: The Pursuit of Progress. In it, he postulated a mathematical equation that describes how bureaucracies expand over time and why.

I don't know if he had a wicked sense of humor or a dramatic flair for irony but the equation at the core of his argument relied on something he termed the "coefficient of inefficiency."

The coefficient of inefficiency says the size of a committee or government decision-making body is determined by the point at which it becomes completely inefficient or irrelevant. Or both - hence the name.

Parkinson determined that the minimal effective size for a decision-making body is about five people, and the optimal size is somewhere between three and 20.

Last time I checked, we had 548 people inside the beltway - 535 voting members of Congress, nine Supreme Court justices, one president, one vice president, one treasurer and one Fed chairman - who are responsible for making decisions on behalf of 330 million citizens.

Combine that with nearly 2.8 million total Federal employees (excluding our military) and we're waaaaay beyond anything even remotely resembling workable decision making.

Now here's the thing. Parkinson also observed that bureaucracies grew by about 5%-7% a year, "irrespective of any variation in the amount of work (if any) to be done."

In other words, the larger bureaucracies become, the more ineffective they get even if additional people are hired to do work that doesn't exist.

And to think, all this time I thought our government ran on the Peter Principle!

Parkinson attributed this to two things:

1."work expands so as to fill the time allotted for its completion." In other words, if you leave everything to the last minute, it will only take a minute to get done. Perhaps this is why my youngest son never picks up his room until mom's coming upstairs to take a look or why the budget ceiling isn't ever negotiated except under deadline.
2.Government agencies (and their staffers) want to multiply subordinates--not rivals. This is because many government employees associate their own individual importance to the number of subordinates.
So actually doing anything that's productive...like...oh...I don't know...fixing the deficit, reducing spending, definitively regulating Wall Street, and helping people who truly need help becomes an exercise in futility.

Now here's where this gets really interesting, at least to me.

The Problem with Bureaucracy

Despite what our leaders and those who want to be elected as our leaders constantly talk about--multipliers, stimulus, economic incentives etc. -- our government can never be run efficiently.

By its very design, it's not intended to.

In his 1944 work, Bureaucracy, Ludwig von Mises, the famed Austrian free market economist, theorized this is because government leaders insulate themselves.

He observed that the champions of socialism "call themselves progressives but recommend a system which is characterized by rigid observance of routine and by a resistance to every kind of improvement."

I suspect if he were writing today, he'd use the term liberals, but that's a topic for another time.

Not that any of this is surprising, but Mises also noted that bureaucracies are socially self-interested and completely irrational when it comes to economics that could actually improve the public's welfare.

So what are we to do?

I actually think the answer is pretty simple - we change the system.

Look, I am not trying to be trite, but think about it.

If we buy off on the inefficiency postulated by Parkinson and the reasons for isolation proposed by Mises, political parties don't really matter much -- if at all.

What actually matters is the motivation driving the people who serve the rest of us.

Fix that and by implication we fix a whole host of other problems.

Make Them Live Like the Rest of Us

Let's see who in Washington really wants to serve our country if they get the same benefits our soldiers get, an idea floated to me during a recent flight by my friend Andrea Barry, Managing Partner of Eleventh Hour and herself a retired career military officer.

Require them to fill out their own insurance applications and tax forms like the rest of us.

Neutralize their ability to personally benefit from decisions they make on behalf of the rest of us. If they violate the rules, immediately haul their sorry butts into court after subjecting them to the politician's equivalent of courts martial. Implement jail time.

Then, we'll see who really wants to "serve."

If you think I'm being too harsh, let me offer you a personal challenge.

Try voting for something YOU believe in instead of something you stand against this fall or toeing the "party line."

Perhaps then we'll get some hardworking, ethical, and properly focused leaders who do their jobs...and go home.

And you know what?

I bet we would see an entirely new generation of actual leaders who are truly worthy of carrying that title and who still want to serve despite the hardships involved.

We don't need more bailouts...we need a shakeout.

Source :http://moneymorning.com/2012/05/23/election-2012-forget-bailouts-we-need-a-shakeout/

Money Morning/The Money Map Report

©2011 Monument Street Publishing. All Rights Reserved. Protected by copyright laws of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), of content from this website, in whole or in part, is strictly prohibited without the express written permission of Monument Street Publishing. 105 West Monument Street, Baltimore MD 21201, Email: customerservice@moneymorning.com

Disclaimer: Nothing published by Money Morning should be considered personalized investment advice. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investent advice. We expressly forbid our writers from having a financial interest in any security recommended to our readers. All of our employees and agents must wait 24 hours after on-line publication, or after the mailing of printed-only publication prior to following an initial recommendation. Any investments recommended by Money Morning should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company.

Money Morning Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in