Pournelle’s Iron Law of Bureaucracy states that in any bureaucratic organization there will be two kinds of people: First, there will be those who are devoted to the goals of the organization. Secondly, there will be those dedicated to the organization itself. The Iron Law states that in every case the second group will gain and keep control of the organization. It will write the rules, and control promotions within the organization.
That is what we see with the bankers. The people running the system care only about the system, not the alleged goals of the system. No one ever asked if near zero interest rates was good for the economy. They do not care. What mattered is what is good for the financial system and the people running it. When inflation promised to become dangerous to their position in the system they raised rates, but now that raising rates is threatening the system, they will stop raising rates.
We are about to have another banking crisis because no one in the system bothers questioning what happens in the system, outside of those things that threaten the position of those atop the system. Cheap money underwriting you-go-girl capitalism makes them feel good, so they do it. If the polices warp the overall economy and puts the middle-class at risk, they do not care. All that matters is the internal dynamics of the system and how it impacts the people in it.
Replicate this silo mentality across the empire and you can easily see why the ruling class appears to be out of touch with reality. The reason is their reality is not our reality, but the artificial reality of the system. Right now, banking regulators are telling each other they are heroes for working the weekend to stem a bank run, while the rest of us see another trillion getting printed up and handed to the greed-heads who have been looting the economy for generations.
Of course, none of these silos of power are independent. The political silo will get in on the act when Joe Biden mumbles something about it this morning. Expect to hear lots of statements beginning with “we did…” from various political operatives, claiming that they are the real heroes of this crisis. …
What all this means for the rest of us is the grocery bill will rocket up this year as the bankers are bathed in free money to save the system. We will get new narratives from the Cloud People about how the food bill is a conspiracy theory or maybe it is the work of the Chinese, who are the new bogeyman. The people at the top will sleep well knowing they have once against defended the system from the barbarians of reality who threatened to crash through the gates.
Bankers tend to be quite wealthy and have pretty easy hours. There is a lot of surplus value in creating money out of thin air.