Cheap by comparison with Obama’s stimulus spending plans, the original New Deal remains something about which many people are more enthusiastic than they are about the sort of radical capitalist vision I discussed yesterday. Adam Cohen of the New York Times even wrote a ludicrous editorial recently lamenting that the problem with the New Deal (contrary to what those pesky free-market revisionists say) was that it didn’t spend enough.
Luckily, we have things like this half-hour video in which historian David Kennedy, economist Lee Ohanian, and others take a more sober look at the New Deal and why happy days weren’t there again. (Economist Don Boudreaux suggests taking note of David Kennedy’s twist in the video on Naomi Klein’s paranoia about free-market “shock doctrine” tactics.)
If you prefer NPR, though, my friend Diana Fleischman (who you will hear about again during my “Month of Evolution” next month) notes two recent NPR stories of interest: one about a fairly-libertarian suburb giving tax money back to residents and one about Joe the Plumber becoming an Iraq correspondent for Pajamas Media — the coolest thing the underestimated Joe’s done since recommending the public read libertarian economist Ludwig von Mises, a reminder the populists really do know more than the elite sometimes. (Now if only Pajamas Media responded to my inquiry about whether there’s any way to watch my own most recent appearance without paying them $14 a month — if not, I begin to suspect what their business model is and predict they will have many, many guests on.)
And speaking of conservative online media: tomorrow, a few notes about some of the bloggers at Culture11 (including girlfriend Helen Rittelmeyer), combined with an observation about jazz and race, just in time for Martin Luther King Day.
I’m interested in your thoughts about how to deal with the present financial crisis. The libertarian voice has been sorely missed in discussions on the topic, and some of that persuasion have come up with surprising statements (such as Epstein and Greenspan).
Let’s set aside causes (in the sense of, “well, it would never have happened had we just kept to the gold standard” or something like that). If you were given sudden dictatorial power over the US gov’t the day after Lehman failed, what would you have done and why?
Coincidentally, I think the only other time I’ve publicly answered that question was in that most-recent (Dec. 31), predictions-oriented Pajamas Media interview I can’t watch for free — but I’ll save you all $14/month by telling you roughly what I said, which is that, first of all, I may know the basics of econ but do not for a moment pretend to understand finance, so if I were suddenly Fed chair or Treasury Secretary (let alone dictator), it would be a bad sign indeed.
That said, I’d err on the side of letting as many guilty/contributory institutions fail as possible short of allowing the full-blown credit crisis that some assure me would be like the economic end of the world. Cars do not have to be built in Detroit, and we might see radical improvements in investment-offers transparency if the revered but bungling firms that got us into this mess were allowed to die and spare us the (subtler, more protracted but possibly on balance greater) pain of putting up with them for years to come.
But as some have pointed out, that’s partly an ideological impulse shared by both radical rightists and leftists that simply says “No soft landing at others’ expense for fatcat screw-ups.” Is it much guide to sound policy? I don’t really pretend to know. I do know people have a habit of assuming, mistakenly, that we mustn’t allow current institutions to fail because nothing can be imagined taking their place. We need currency and investments, but we don’t need GM or Goldman Sachs per se — and I’m both wary of cozy Wall Streeters being our potentially self-serving gurus during this crisis and wary of the whole world being as wary as I am and thus never investing again.
Then when you factor in the ice age and the bee die-off, things start looking grim indeed.
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