Tag Archives: federal-reserve

Can anyone think of an angrier group of writers in political punditry than the ones currently published at Salon.com? Throughout the Elena Kagan hearings, both Joan Walsh and Joe Conason have written anti-Republican screeds accusing GOP lawmakers of all sorts of unsavory things to score political points despite what’s likely be a certain confirmation. However, this disposition goes beyond just the SCOTUS hearings. On MSNBC’s June 30 “Morning Joe,” Conason went after Harvard Professor Jeffrey Miron, who appeared to promote his book ” Libertarianism, from A to Z .” Apparently what drew the indignation from Conason was the theory that government can actually make things worse in an economy:  CONASON: Do you know anything about American history? MIRON: Yes. CONASON: OK. Didn’t we have that regime in the 19th Century? MIRON: We did. CONASON: How did it work? MIRON: It worked better than the current regime. CONASON: Does the year 1873 ring a bell for you? MIRON: Yes. CONASON: What happened then, professor? MIRON: There was a financial crisis. CONASON: How long did it last? How many people were unemployed? SCARBOROUGH: Joe, Joe, Joe – CONASON: No, seriously. JOE SCARBOROUGH: Answer. MIRON: If you go and look at the recent produced data by an economist, OK – on industrial production over the period from 1800 to 1910 for the period when we didn’t have a Fed or all the financial regulation, you will see that the average growth is as good or better than it has been since we had all this intervention. You’ll see that the length of recessions was on average shorter. You will see that he says –   CONASON: The average Americans were more prosperous in the 19th Century than the 20th Century? MIRON: Relative to the world, yes. We were growing more consistently. We had less volatility. His paper shows that there was actually – CONASON: What happened in 1873? How many people were thrown into work? Describe it. MIRON: I don’t have data on it because nobody has data unemployment rates for that period. There weren’t any. He has data on how well was the production. CONASON: How many depressions did we suffer during those years? MIRON: We didn’t suffer any depressions until we had a Federal Reserve starting in 1914 and then ’29 through – we did not suffer anybody anything is classifying. We had recessions. Nobody is saying it would be perfect.  Conason was correct to note that there were a series of panics before the 1900s, but inimitable circumstances drove these panics, not the absence of the Fed, which senior Cato Institute fellow George A. Selgin explained in a column last fall . According to Selgin, it was the post-Civil War policy measures that spurred these periods of recession.  “Morning Joe” host Joe Scarborough inquired about the unfunded liabilities that have many libertarian economists concerned, and asked Miron if he subscribed to the unpopular view that Medicare should be abolished. Miron suggested reforms that wouldn’t tax the system.  “Not right now. I certainly think that any adjustments are gradual,” Miron said. “People currently receiving Medicare of course should get Medicare for the rest of their lives. But telling people who are now 55 – you don’t get Medicare until you are age 70 rather than 65 is totally sensible.” And Miron said it should be eventually phased out altogether except for the “very poor.”  “I think what libertarians, including me, would say is there should be government-provided or subsidized health insurance for only people who are very poor,” Miron said. “The vast majority of people on getting health care under Medicare are not poor, so gradually phase Medicare down.”  Scarborough moved on to the financial reform legislation.  “Let me ask you another question – another question regarding Wall Street regs,” Scarborough said. “You are right, it is very hard, but the fact is we had a crash in ’87, ’98, Asian crisis, ’99, long-term capital, 2000, the dot com bust. 2002, Fannie, 2003 – well, we also had Enron, WorldCom, 2008 – it seems to me the conservative thing to do is actually set tough rules on Wall Street and say, ‘These are the rules you are going to play by. Don’t cross the lines.'” While many conservatives will admit there is a need to reform financial regulation, they aren’t clamoring for more regulation as Scarborough suggests. In fact, the Heritage Foundation in a June 29 post suggests the current bill being negotiated between the House and Senate is still very flawed and doesn’t show that the federal government has learned from the regulatory mistakes of the past. And as Miron explained – it’s not the regulation necessarily – that banks will “innovate” around that in the long run. Instead, he points to a system that attempts to minimize risk as the fundamental problem. “Given that we guarantee risk, basically, two ways – one explicitly through the FDIC and second implicitly by having the TARP and all that,” Miron replied. “Clearly, we would like to prevent banks from taking too much risk, but there doesn’t seem to be a good way to do that effectively. Banks innovate around it. They use accounting gimmickry. The regulators are asleep at the wheel. And so thinking we are going to fix it with more, tougher regulation I think is not right.”

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Angry Liberal Columnist Attacks Libertarian Economist; Scarborough Redefines Regulation and Conservatism