“When business in the United States underwent a mild contraction…the Federal Reserve created more paper reserves in the hope of forestalling any pssible bank reserve shortage. The “Fed” succeeded;…but it nearly destroyed the economies of the world, in the process. The excess credit which the Fed pumped into the economy spilled over into the stock market–triggering a fantastic speculative boom. Belatedly, Federal Reserve officials attempted to sop up the excess reserves and finally succeeded in breaking the boom. But it was too late:…the speculative imbalances had become so overwhelming that the attempt precipitated a sharp retrenching and a consequent demoralizing of business confidence. As a result, the American economy collapsed.” — Alan Greenspan, “Gold and Economic Freedom”, The Objectivist, 1966.

It’s useful and instructive to all of us that some folks are approaching this in what I would call a non-ideological fashion. I’m tempted to call it promising and encouraging, But let’s face it, if even a few well known Republicans are seriously considering such an approach, that speaks to how poorly the system is functioning under current circumstances. So while it’s encouraging from the perspective of meeting current challenges, it’s not very encouraging from the perspective of gauging how big those challenges are.