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Chapter 11: Austrians vs. Keynesians

the young generation. He believes that an economy
based on principles, on the other hand, is flexible and
better equipped to adapt to changing conditions.

Philip K. Howard writes about rules in his book
The Rule of Nobody – Saving America from Dead Laws
and Broken Government. Howard explains how the
rules constrain and bog down nations. In a world of
rules, no one is in charge because the rules rule instead
of people. Rules have replaced principles, and everyone
is affected.

John Yates is the captain of the Miss Katie. He
was fishing for grouper in the Gulf of Mexico when the
Florida Fish and Wildlife Commissioner boarded his
boat for a routine inspection. The Commissioner
charged Mr. Yates with having aboard 72 grouper fish
smaller than the 20 inches allowed. When he got into
port, federal officials counted only 69 undersized fish.
The agents charged him with violating the anti-
shredding provision of the Sarbanes-Oxley Act, which
carries a 20-year prison
term. John Yates was
The Justice Department
a victim of the ruling has used rules to extract
when no one with multi-million-dollar
common sense was in settlements from banks.
charge.

The Justice Department has used rules to extract
multi-million-dollar settlements from banks. The
Department has applied fines to lenders for not having
a quality-control process that follows Federal Housing
Administration guidelines. If there are mistakes, such as
misstating a borrower’s income by a tiny amount, the

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