Between the wars most of the European governments – Britain and, to a lesser extent, France, being exceptions – lived lives that were, to paraphrase Hobbes, weak, unstable, and short.
Civilization is like a very fine suit of clothes that is just slightly too small for us.
If we care about the health of free market economies, then we need to care about how efficiently capital is allocated in those economies. And if we care about efficient capital allocation, then we need to care about the health and efficiency of capital markets, because those markets are the principal instruments we have for the allocation of capital. And if we care about the efficiency of capital markets, then we need to care about the asset management business, because that is what makes capital markets efficient.
The core problems with central bankers, which have led directly to the catastrophes of the Tech Bust, the Financial Crisis, the pathetically weak recovery from the Great Recession of 2008-09, and the near-destruction of the asset management business, are these:
We are talking about the traumatizing events that rocked the asset management business, to say nothing of the world, beginning in 2008, a calamity brought to us courtesy of the world’s central bankers.
The asset management business as we know it today got started in the mid-19th century. The impetus for investment management firms separate from banks arose out of the awkward fact that banks often fail, while asset management firms hardly ever do.
I would rather be governed by the first 2,000 names in the Boston phone book than by the Harvard faculty. William F. Buckley
The vast Federal regulatory apparatus that we know and love today got its start early in the 20th century under President Woodrow Wilson. Appropriately, Wilson was the only President in US history to earn a PhD – he’d been president of Princeton University.
Back in 1986 I launched a wealth management firm I conceitedly called “Greycourt” – it’s an anagram for my name. The firm met with modest success and in 1988 I incorporated it. I was probably the most hopeless, bumbling entrepreneur in the history of private enterprise, but somehow I’ve been with Greycourt for 31 years.
As far as reigning in annoying experts is concerned, Congress and the judiciary are a bust, albeit with a few tiny bright spots on the distant horizon, twinkling away like dying lighthouses on a storm-tossed sea. But what about the Presidency?