BTW, I’m not suggesting the effects of government are always good. Clearly, they’re not. Greenspan and the Fed played quite an important role in the present circumstance.
However, asserting all government involvement is bad is equally idiotic. Government absolutely has a valuable role in regulating market conditions. In an ideal world, there’s counter-cyclical fiscal stimulus to offset business cycle contractions (accompanied by cutbacks when times are good).
Most of us believe there is a middle-ground role for government based in effective pragmatism that curbs inherent problems associated with markets and mitigates the likelihood of situations such as what we face right now.
Imagine a banking industry with conservative ‘rules’? Imagine that. This is actually consistent with what HLS is saying, BTW. Except that it REQUIRES government laws and regulations to enforce. You cannot depend on the market to regulate itself. That much should be evident.
Also, I find it hard to make room for a WSJ editor’s ‘revisionist history’ of the Great Depression given 80 years of ‘mainstream history’ written by people who actually lived through it, and especially in light of current circumstances. The similarities between the 1920’s and the first decade of this century speak otherwise.
