The Eternal Recurrence of Alan Reynolds


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.

NEXT: Freddie, Fannie, and McNasty

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

  2. Anyone got Obama’s and McCain’s email address?

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

  3. 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.

  4. Dear American:

    I need to ask you to support an urgent secret business relationship with a transfer of funds of great magnitude.

    I am Ministry of the Treasury of the Republic of America. My country has had crisis that has caused the need for large transfer of funds of 800 billion dollars US. If you would assist me in this transfer, it would be most profitable to you.

    I am working with Mr. Phil Gram, lobbyist for UBS, who will be my replacement as Ministry of the Treasury in January. As a Senator, you may know him as the leader of the American banking deregulation movement in the
    1990s. This transaction is 100% safe.

    This is a matter of great urgency. We need a blank check. We need the funds as quickly as possible. We cannot directly transfer these funds in the names of our close friends because we are constantly under surveillance. My family lawyer advised me that I should look for a reliable and trustworthy person who will act as a next of kin so the funds can be transferred.

    Please reply with all of your bank account, IRA and college fund account numbers and those of your children and grandchildren to so that we may transfer your commission for this transaction. After I receive that information, I will respond with detailed information about safeguards that will be used to protect the funds.

    Yours Faithfully Minister of Treasury Paulson

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

  6. 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?

  7. 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”?

  8. “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.

  9. 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.

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