Understanding Regime Uncertainty

by Don Boudreaux on October 29, 2010

in Inventive intervention, Myths and Fallacies, Reality Is Not Optional

Writing in today’s Wall Street Journal, Robert Reich reveals his misunderstanding of regime uncertainty.  Unleashing this destructive uncertainty requires more than simply changing in major ways government’s role in the economy.  Instead, regime uncertainty is increased by changes that portend into the indefinite future a greater degree of arbitrary government economic intervention.

For this reason, talk of replacing the Federal Reserve’s arbitrary monopoly over the U.S. money supply with a more decentralized and competitive monetary system does not – contrary to Reich’s claim – spawn regime uncertainty of the sort that is spawned by “Progressives’” talk of (and action toward) empowering government with ever-more authority to tax, spend, borrow, block, ‘protect,’ punish, reward, subsidize, bailout, restrict, require, prohibit, cap, withhold, grant, ‘quantitatively ease,’ ‘universally insure,’ stimulate, regulate, investigate, interrogate, moratoriate, and otherwise override with politically poisoned official diktats the private choices and contracts of individuals.

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