Comments on: Regulatory reform: The pessimism panel A slice of lime in the soda Sun, 26 Oct 2014 19:05:02 +0000 hourly 1 By: Don the libertarian Democrat Sat, 26 Sep 2009 07:29:41 +0000 Maynard,

There was a time when Fisher, Knight, Simons, Viner, and Milton Friedman, were all considered Free Market Advocates, believe it or not. The Chicago Plan of 1933 was a Free Market Plan as well. I think that the others I mentioned would all consider themselves Free Market Advocates too.

I also advocate:
1) A Negative Income Tax ( M. Friedman, Charles Murray )
2) Milton Friedman’s Universal Health Plan. ( Also Hayek )
3) Milton Friedman’s Plan in the essay “A Monetary and Fiscal Framework for Economic Stability”.
4) The Legalization of Drugs

I could go on. Following Adam Smith, I believe that there is a role for govt. Believe it or not, he favored the govt intervening in banking and monetary matters. I also follow Edmund Burke, who was a Whig. Add Bagehot and Keynes, and you’ve pretty much got one person who advocates every position I advocate.

It seems that libertarian is now thought by some to mean only Mises and Rothbard, and the people who follow them. That’s fine with me. My first choice for a posting name was Don the Burkean Whig, but I thought that that was even more problematic than Don the libertarian Democrat. I do like paradoxes, as did Schumpeter, so it could be that I’m drawn to the idea that only the Democratic Party would give my views a real hearing.

I’m sorry that I gave such a long and detailed answer, but I’ve just finished the second draft of a novel of 359 pages and 190,000 words, so I’m still up tonight in a very good mood.

Take care,


By: maynardGkeynes Sat, 26 Sep 2009 04:39:29 +0000 Don, you sound a lot more like a Democrat (genus l.summers) than you do a libertarian. What about free markets?

By: EmilianoZ Sat, 26 Sep 2009 04:32:19 +0000 Why do you have to classify them as lefties? Don’t you think this black/white-think has done enough harm to this country?

What if I’m a righty reading this? I can just stop thinking. Oh! These are lefties. That’s just crazy talk.

By: Don the libertarian Democrat Fri, 25 Sep 2009 21:21:10 +0000 “There’s a crystallizing conventional wisdom, certainly out of Washington, that it worked. It was ad hoc, it was messy, it was poorly planned, but in the end all this fumbling from Bernanke and Geithner and Paulson ended up working.”

That’s how the real world works. There are any number of other things before and during this crisis that could have been done better. But they could also have been done worse. After reading Fisher and Simons on Debt-Deflation, and being convinced by their arguments, I find the idea that we wouldn’t have used an approach like the Chicago Plan of 1933, which used QE and a Stimulus, and anything else that made sense, hard to understand. We adopted the Chicago Plan because it made the most real world sense, as it did in 1933 as well.

I think that this talk is a better view, which I found on Greg Mankiw’s blog:

“Back from the Brink
Christina D. Romer
Chair, Council of Economic Advisers
Federal Reserve Bank of Chicago
Chicago, Illinois, September 24, 2009″

“The policy response in the current episode, in contrast, has been swift and bold. The Federal Reserve’s creative and aggressive actions last fall to maintain lending will go down as a high point in central bank history. As credit market after credit market froze or evaporated, the Federal Reserve created many new programs to fill the gap and maintain the flow of credit.
Congress’s approval of the not-always-popular TARP legislation was another bold move. Creating a fund that could be used to shore up the capital position of banks and take troubled assets off banks’ balance sheets has proven both necessary and valuable. I firmly believe that the capital infusions last fall, many of which are now being paid back with interest, were a key part
of the thin green line between stability and continued crisis.”

I’m all for change, but that entails following the rest of the Chicago Plan of 1933. It’s still the best place to begin considering change. Since Fisher, Knight, Simons, Viner, Friedman, Minsky, Kay, and Buiter all favor/ed a version of this idea, surely it’s worth looking into. Try this post as well:

“In Praise of More Primitive Finance
Amar Bhidé”

By: Jesse Eisinger Fri, 25 Sep 2009 20:51:51 +0000 Thanks for the write-up, Felix. On the last point about the “lefty view,” I think that, in fact, there’s remarkable agreement between the left and the right on the bailouts. Both see a big problem with the creation of moral hazard and the creation of even larger banks and more concentrated risk. Both are troubled by generous taxpayer expenditures for the banks without adequate compensation. I’m tempted to say that there is more agreement on this issue btn the right and the left than any other issue in all of American politics. It’s sort of like how the ends of a straight line end up converging if it’s long enough.