If a dose of something — whether medicine or socialism — is recommended, then the symptom should be diagnosed correctly. Mr. David Riegner, in his Feb. 4 letter “Bad economy could use a dose of socialism,” makes the wrong diagnosis and, consequently, the wrong recommendation of dosing an already overdrugged patient.

If there’s one thing we should all be clear on, it is that laissez-faire capitalism is not responsible for this recession, nor any past recession. Think what you want about laissez-faire and capitalism, whether it’s the cat’s pajamas or a nasty hair ball, but don’t put it at fault when it is not.

To clarify, let’s define laissez-faire — because Mr. Riegner never clearly defines it, just as he does not define what deregulation caused our recession and how. Laissez-faire roughly translates into “to let do.” Because capitalism is an economic system based on private property, we can define laissez-faire capitalism as a system where property owners are left to their own interests.  Our banking industry is anything but laissez-faire. It is, after all regulated by the Federal Reserve System, our central bank. The Fed determines how much a bank can hold in reserve, what legal tender the bank can use, what the interest rate between banks is, and how much money to print.

To call this laissez-faire is to call a sadist a philanthropist. If Mr. Riegner faults banks now and 80 years ago for lending too much and “creating money that didn’t really exist” he has only one place to blame for this — not the free market that pleads, “let me be,” but the government that shouts, “do it my way!”

I can agree with Mr. Riegner, and President Barack Obama, in blaming the banking industry. Our agreement ends there. They look only at, and blame, the boulder that crashed through our economy and destroyed its floor. We must look at who heaved the boulder and sent it on its destructive path. And that is today, just as it was 80 years ago, the loose monetary policy of a bank with the political privilege of that policy — from 1819 to 2008.

Theodore Wolff

Alumnus

Iowa State University