A pro-regulation mindset blinds leftwing economists from understanding how anti-egalitarian bank regulations are.

Sir, Gillian Tett writes “Rightwing economists tend to blame government regulation for lower growth” and since she does clearly not think so, I guess she identifies with the left, “A puzzle Yellen cannot solve with a rate rise” December 4.

I blame regulations for lower growth and especially the credit-risk weighted capital requirements for banks that distort the allocation of bank credit to the real economy.

Favoring bank lending to what is perceived as safe de facto discriminates against the fair access to credit of those perceived as risky. And so inasmuch as it fosters inequality, and inasmuch as the left professes to hate inequality, leftwing economist should also oppose that regulation.

In “Money: Whence it came where it went” 1975: John Kenneth Galbraith, wrote “The function of credit in a simple society is, in fact, remarkably egalitarian. It allows the man with energy and no money to participate in the economy more or less on a par with the man who has capital of his own.”

The problem with leftwing economist is that their mind set is so pro-regulation they cannot fathom regulators doing any wrong, and also so against the bankers, that they blind themselves to that credit-risk weighing is as anti-egalitarian as regulations come.

@PerKurowski ©