Who is this guy?
In another unsurprising George Will column
slamming Obama, he writes:
Five months after enactment of TARP, a plan for unfreezing the credit system remains, like Atlantis, rumored but unseen. Twelve months after the government brokered the marriage of Bear Stearns and J.P. Morgan Chase, the government is recapitalizing financial institutions that the market has said should be shuttered. Lawrence H. White, economics professor at the University of Missouri at St. Louis, denies that financial institutions ever were "unregulated." Hitherto, such institutions were "regulated by profit and loss":
"The failure of Lehman Brothers and the near-failure of Merrill Lynch raised the interest rate at which profit-seeking lenders were willing to lend to highly leveraged investment banks. The market thereby forced Goldman Sachs and Morgan Stanley to change their business models drastically and to convert to commercial banks. If that isn't effective regulation, what is? Protecting firms from failure (Bear Stearns, AIG, Fannie Mae, Freddie Mac, Goldman Sachs, Citigroup) and mitigating their losses with bailouts renders this most appropriate form of regulation much less effective."
In other words, we don't need no stinkin' regulation - we already got some (the "invisible hand" will spank you when appropriate). No government action needed; it's the neo-Hoover stance.
But more interestingly, who is Lawrence H. White, the fellow that Will cites? From Wikipedia
Dr. White's account of competitive currency issue in Scotland details history's best case for why there should be private issue of currency. The successful history of the Scottish system contradicts the presumption that banking regulation should be considered a public good. White's analysis implies that modern banking systems could function without a central bank, for example the Federal Reserve system of the United States.
- Private issue of currency.
- No government regulation of banks.
- No Federal Reserve.
Anybody on board with that?