Resident Fellow Alex J. Pollock

Sir,

John Plender ("Wisdom for a punch-drunk Wall Street," August 31) describes the theory of the Fed under Alan Greenspan as "hands-off in the upturn but super-active in loosening policy and rescuing overextended financial institutions," which he says is a "libertarian approach to monetary policy." But to call this "libertarian" is ridiculous.

Libertarian theory would oppose having a government monetary price-fixing committee (which is what "monetary policy" means), which it views as just another probably blundering government intervention. (History would provide a lot of support on this point.) Libertarian monetary policy would be for the price of money to be set in the same way as the price of potatoes.

You can agree or not with this theory, but it bears no resemblance at all to that of the Greenspan Fed.

Alex J. Pollock is a resident fellow at AEI.