Magazine | October 29, 2018, Issue


Attendees at the New Jersey State Fair in Augusta, N.J., August 12, 2018. (Eduardo Munoz/Reuters)

Still Rethinking the Recession

While I do agree with Ramesh Ponnuru’s article “Rethinking the Recession” (September 10) that the Fed’s monetary policy prolonged the damage done in the 2008 recession, I would add the view from Brian Wesbury’s book It’s Not as Bad as You Think: Why Capital Trumps Fear and the Economy Will Survive that the financial markets dropped significantly after a change in the way companies reported their income and assets: In November 2007, the government allowed the Financial Accounting Standards Board to start enforcing a very strict mark-to-market rule (Rule 157).

Wesbury states: “When we add up all the potentially bad loans and losses experienced by financial institutions in the early 1980s, it appears that our problems were much worse then. The crisis that began mid-2007 was much smaller.” Wesbury makes a solid case that the catalyst making things spin out of control so rapidly was mark-to-market accounting, which forced financial firms and auditors to use “exit” prices to value securities rather than the price at which a willing buyer and seller would trade.  

Within a year, the U.S. was in the middle of the worst pure financial panic in 100 years. Coincidence? Absolutely not. The government should have never let this happen. And once it did, the negative effects were seen so clearly in 2008 that it should have suspended the rule immediately. The congressional hearing that changed everything took place on March 12, 2009, but was announced about a week before. This, as it turns out, coincides perfectly with the bottom of the stock-market decline. 

Both authors make compelling cases about the dreadful recession in ’08, and both shed light on what can be done to avoid recessions in the future.

Jeff Daniels
Medina, Ohio


From the Fairgrounds

I was interested in Jay Nordlinger’s article “State Fair” (October 1). He accurately covered a good portion of our state fair.

No, the managers of the Birthing Center are not able to schedule a calf to be born every “owah.” However, I do believe there is at least one every day. This feature is very popular, and educates non-farm people about life (and, sometimes, death) on the farm.

I would like to point out a feature Jay did not mention. (I do realize it wouldn’t be possible to cover everything!) In the Horticulture Building is the New York State Maple Center, which, if Jay had seen (and tasted samples from) it, I’m sure he would have raved about! The NYS Maple Producers Association has had an educational booth in the Horticulture Building since the early 1950s. As a maple-producing family, we have been involved most of that time. I was assistant manager of the volunteer-staffed booth from 1986 to 2015.

It became the Maple Center around 2008, when the booth was greatly expanded. Besides many sizes of containers of maple syrup, candies, and maple cream, there is now maple cotton candy, maple kettle corn, maple ice cream, maple milkshakes and slushies, and maple Hofmann sausage.

Jay, come back to the fair soon, and be sure to stop by the Maple Center and enjoy!

Dean Delavan
Cincinnatus, N.Y.

NR Editors includes members of the editorial staff of the National Review magazine and website.

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