The Macroprudential Motive

America's founders distrusted pure democracy.  They feared it would devolve into a tyranny of the majority whereby majorities would act as dictators over minorities and individuals.  For this reason, they established a constitutional republic, a representative democracy, buttressed by a Bill of individual Rights.

We often hear demagogues propose what is big-picture best: policies that will minimize pain for a majority or maximize gain for the many.  Their arguments are compelling.  They seem to contemplate what is best for the most.  They express sympathy for what seems to be mainstream.  Often, they are propounded by experts.  Of course, we should always consent to such macro-prudence?

For example, some might assert that to save or stimulate the economy more extreme and extra-legal interventionism is prudent as dictated by the Federal Reserve.  After all, isn't resuscitating our economy worth every and any expense?

What is arguably macro-prudential may be adverse to what is micro-existential.  If pure democracy might devolve into a tyranny of the majority, macroprudential policy might become a tyranny of enforced opinions dictated by "experts" to "save" the rest of us dumb blokes from ourselves and our individual rights.  Recognize that, in crisis, macroprudential arguments are used to overcome restraints (ie. constitutional restraints, legal restraints, moral restraints, restraints on government).  The pursuit of what is prudent from a macro-perspective is good as long as it is restrained by the rule of law.  When it isn't, it is just the prudence of a pack as sensed by the olfactory of a fallible, hungry alpha male.