Adam Darwin: Emergent Order in Biology and Economics (Matt Ridley)

I, Pencil: The Movie

Not so long ago

Prof. Philip Booth: We need a revolution in financial regulation

It may surprise many that, until recently, banks did not have their capital regulated. Of course, before 1979, neither banks nor their customers had any expectation of being bailed out – market discipline prevailed. The history of banks’ capital positions is interesting. During the post-war period, banks were pressurising the Bank of England to allow them to hold more capital – they were prevented from doing so because the government and the Bank of England believed that, if the banks raised more capital, there would be less capital available for the non-financial industries. Banks exposed to market discipline were conservative institutions. I wonder if the post-1988 regulatory binge has really achieved anything positive.

Regulation has run riot and so did the banks. Last year alone there were 14,200 new banking regulations worldwide and the US Dodd Frank Act will contain around 30,000 pages of regulations. Furthermore, there is a real danger, when regulation becomes as complex as it is today, that it is only understood by a clique both in government and in the industry. That is a recipe for regulatory capture – in other words, the controlling of the regulatory system by the companies that are being regulated. The approach of the UK government which is trying to create a legal framework so that banks can be wound up safely is to be applauded, but this should replace and not be added to existing regulation.

Um bom resumo da situação

Constitucionalmente falidos (Carlos Guimarães Pinto)

Nos 7 anos imediatamente seguintes à aprovação da Constituição de 1976 foram necessárias duas intervenções do FMI para evitar o descalabro financeiro. Deveria ter servido de aviso. A entrada na CEE e posteriormente no Euro permitiu o adiamento da terceira vinda, mas não eliminou o problema fundamental: a Constituição, e as interpretações que se foram fazendo dela, é um entrave à estabilidade e prosperidade económica. A Constituição salvaguarda o direito à educação, à saúde, à segurança, à habitação, ao emprego e à cultura, mas não gera a riqueza necessária para garantir esses direitos, nem ajuda a criar as condições necessárias para a gerar. Para prosperar economicamente é necessário trabalhar, investir e arriscar. Em vez de salvaguardar exaustivamente objectivos finais, deveria ser papel da constituição definir um enquadramento que crie as condições e os incentivos necessários a estas actividades. A garantia inequívoca da estabilidade das contas públicas e o estabelecimento de limites à carga fiscal seriam passos nesse sentido. Nas últimas semanas, tem-se clamado pela Constituição a cada medida de consolidação orçamental. A interpretação da Constituição passou de um exercício jurídico a um instrumento de intervenção política. Este uso e abuso da Constituição para o exercício de pressão política ajuda à sua descredibilização e sublinha ainda mais a necessidade de a alterar. Caso contrário, ao mantermo-nos constitucionalmente cumpridores, acabaremos constitucionalmente falidos.

Right on the funny bone

Give social networks fake details, advises Whitehall web security official

A senior government official has sparked anger by advising internet users to give fake details to websites to protect their security. Andy Smith, an internet security chief at the Cabinet Office, said people should only give accurate details to trusted sites such as government ones. He said names and addresses posted on social networking sites "can be used against you" by criminals.

Trusted sites such as government ones? Sure, governments would never harvest data from social networks for their own purposes, use it against citizens as criminals would or think of it as just another tool to help quell dissent. And one of the best incentives to provide the government with real data? They will never lose your personal information or make the contents available to third parties.