Inflation and CBs 6: Central Banks with Bloated Staff

Central banks, being central planners in monetary policy and often, central regulators of the private banking system in each country, are often among the bloated and over-staffed agencies in many countries.

The Economist magazine, December 3, 2009 issue, showed this interesting chart. Five (or more) countries have 5 or more CB staff per 100,000 population -- Russia, France, Germany, Italy, US. I assume that the UK, Belgium are also included in this list.

Chart source,
http://www.economist.com/markets/indicators/displaystory.cfm?story_id=15019848&CFID=100581702&CFTOKEN=90738853

Note that there is already the European Central Bank (ECB), and some EU countries still have their own central banks. I think Asian CBs (Japan, China, India) are not that full of monetary bureaucrats.
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Meanwhile, I wrote these short notes:

(1) Should central banks be abolished?

Central banking is definitely central planning at the monetary sector. I have ambiguous position at the moment whether CBs should be abolished or not, but little sympathy for their continued stay. Should they continue though, I think they should be shrank.

"Inflation targetting" and "price stability" as their main mision -- they never fully achieve that. Price is mainly a function of supply and demand of various goods and services. Housing price and house rental is high because there are not enough condo buildings, townhouses, low-cost housing, etc. The supply of housing unit is low compared to the demand. The price of galunggong, lapu-lapu, other seafood rises because of heavy typhoon which damaged many fishing boats, while demand remains the same. Or overall prices rise because taxes, fees, bribes and bureaucracies keep rising, and producers and traders have to pass such cost to consumers. Monetary policy has little direct bearing on those things. 


(2) Euro Prisoners


Not only Spain but also Greece, Ireland, Portugal, Italy, Belgium are problematic. And on a longer horizon, France and Germany, these countries can be considered as "Euro Prisoners". The absence of a national currency will make it difficult for their governments to institute currency devaluation, only "internal devaluation".

These developments will make it hard for the lobbyists of an Asian currency and an Asian Central Bank to push their proposal. There are just too many central planners around. National central planning like central banking is not enough, there should be regional or continental central planning with a new regional or continental bureaucracy.

Can't people just become plain entrepreneurs who live off not on forcible revenue aka taxes, but on voluntary exchange with the rest of humanity? Lousy entrepreneurs will not satisfy their customers, they ultimately close their business, and they revert back to become average employees or managers. Efficient entrepreneurs satisfy their customers, they expand, they hire more people. Only the lazy and super-choosy will be unemployed and go hungry. Which can be a good thing to discourage laziness and irresponsibility in society.
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See also:
Inflation and CBs 1: Central Banks Can Be Anti-Globalists, June 29, 2006
Inflation and CBs 2: Panama has no Central Bank, February 20, 2008
Inflation and CBs 3: "Bank of Last Resort", March 18, 2008
Inflation and CBs 4: Subsidies and Money Printing, August 07, 2008
Inflation and CBs 5: Capitalism Without Failure is Like Religion Without Sin, September 30, 2008