Why the Fed Should Sit on Its Hands

No, you're absolutely right.

And you laid out several changes on the supply side that would restrict growth in certain ways.

A lot of people were talking a big game about this administration's deregulatory campaign and the impact that would have on the supply side.

Do you buy that? Do you think we've seen significant deregulation? Do you think it has a significant impact?

There's certain deregulation in certain areas.

I mean, I think certainly in the area of fossil fuels, there has been less regulation.

Anything associated with trying to deal with the climate change issue has obviously taken a back burner.

And there are certain areas of investment spending which will probably be accelerated by that.

But I think regulation, just thinking broadly, regulation is an issue we really need to have a second think about because the United States economy has benefited dramatically from deregulation since the 1973s, since the days of Ronald Reagan.

But if you look at the seismic shocks of the 21st century, in some ways they're all a failure of regulation.

The fact we weren't properly regulating who was able to learn how to fly planes.

The fact we weren't regulating the types of derivatives that were being created around the mortgage market or even the issuance of mortgage themselves, who is eligible.

The fact that the Chinese weren't properly regulating the scientists working on viral technology.

All of these issues really led to huge problems.

So, I mean, while I'm very much a libertarian by nature, if we can, I think we have to recognize that the growth of very powerful technologies increases the need for thoughtful, balanced, certainly nonpartisan, non-corrupt regulation.

But I think there is a need for regulation.

And so I'm somewhat skeptical of, A, I'm skeptical of the ability of deregulation on its own to have much impact in spurring economic growth at this point, since so much has already been deregulated.

But also, I think we shouldn't lose sight of the risks that we expose ourselves to if we simply throw regulation out the window.

Well said.

I could not agree more.

I mean, for me, regulation brings market activity into line with the social, economic, ecological goals of society.

And it's not always the case that a freer market is a better market.

What we should be trying to do, another way to say what you were saying, is we need appropriate regulation.

That's very much the

case.