The Eternal Recurrence of Alan Reynolds

Katherine Mangu-Ward | September 23, 2008

As Matt Welch notes below, Cato's Alan Reynolds has a pretty darn smart piece in The Wall Street Journal today.

The very same Alan Reynolds had a really smart piece in reason almost exactly 20 years ago, too:

A year has passed since the steepest stock market drop in almost 60 years, with the Dow-Jones average falling by over a third from October 5 to October 19, 1987. Yet nothing much has come of it. Those who were expecting a deep recession at the end of 1987 instead began worrying, only a few months later, about a supposedly “overheated boom.” The stock market quickly recovered about half of its loss, with stocks of smaller companies doing even better in the rebound of early 1988. The enduring legacy of the Crash of ’87 is that it provided a convenient excuse for a variety of possible increases in government authority, which may yet cause serious economic trouble. The crash has been used to denigrate a prolonged economic expansion during the Reagan years, to support calls for new taxes, and to argue for increased regulation of financial markets.

Something to look forward to.

Comments

Naga Sadow|9.23.08 @ 6:02PM|#

Anyone got Obama's and McCain's email address? We should send the article to them.

|9.23.08 @ 6:42PM|#

Anyone got Obama's and McCain's email address?

You could ask Scarlett Johansson for Obama's. McCain doesn't use email, remember?

|9.23.08 @ 7:02PM|#

I was in my senior year as a finance major when the 1987 crash hit. We had lots of discussions about how this showed that Wall Street and Main Street didn't walk hand in hand. That was an uncrash, in other words.

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Lefiti|9.23.08 @ 8:41PM|#

Ah, economics as theology. Heresy raises it's ugly head. Stamp it out!

Don the libertarian Democrat|9.23.08 @ 9:53PM|#

Wow. Brilliant. Economic crises lead to government intervention. Hold the presses. Also, what's with making the creditors whole? How about admitting, whatever the government did, that a bunch of businesses made some really stupid business decisions and should be held accountable for them. Period. What's with libertarians exonerating business stupidity?

|9.23.08 @ 10:34PM|#

The thing about 87 was that the market kept climbing. The entire "crash" was wiped away within a few years. It was a buying opportunity. How many are buying into this "dip"?

Troll Feeder|9.23.08 @ 10:44PM|#

"Ah, economics as theology. Heresy raises it's ugly head. Stamp it out!"

Yes, torture* these economic radicals until they recant and acknowledge the dominant, traditional, orthodox view of economics, laissez faire libertarianism. Those who disagree shall burned at the stake**!



* Disagree with.
** Re-elected.

Dear Reason|9.24.08 @ 12:26AM|#

Please shove you Free Minds and Free Markets Are Not Free perpetual pop-up spange ad up your bullshit mother fucking asses, you cock sucking bitches.