Procyclical policy?

The regulatory authorities lowered capital requirements during the boom and now want to raise them during the bust. A reaction:

Bove points out that the proposal, which he dubs absurd, would “effectively take U.S. banks out of the financial system for an extended period. It would have a similar impact on the economy as the Fed’s two reserve ratio increases in 1937 which plunged the United States back into depression.”

The king of ranters

Nobody writes rants like Mark Steyn.

The Treasury crowed that Fiat had agreed to pay a whopping $560 million for the government's Chrysler shares.Wow! 560 million smackeroos! If you laid them out end to end, they're equivalent to what the federal government borrows every three hours. That's some windfall! In the time it takes to fly Obama to Toledo to boast about it, he'd already blown through the Italians' check.

A small bit of a longer piece that no single excerpt can do justice to. Read the whole thing. As someone who occasionally writes rants, I am awed at the skill of Mark Steyn.

The scary thing is he is probably right about the three hours.

Shlaes the supply sider

Amity Shlaes has explored the Great Depression from the supply side, arguing that government distortion of markets and hostility towards business is key to explaining why the Depression was as deep and as long as it was. In this, she is quite different from Friedman and Schwartz, who had a demand-side explanation. I wonder if Milton Friedman would have altered his telling of the story if he had seen what Shlaes and others have written.

Her most recent article is here. She argues to understand what is wrong with today's economic policy is the same thing that was wrong with economic policy in the 1930s. Her book, The Forgotten Man: A New History of the Great Depression is essential reading for anyone interested in the Great Depression.