Conversations with Tyler George Selgin on the New Deal, Regime Uncertainty, and What Really Ended the Great Depression
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Oct 15, 2025 
George Selgin, an economist and monetary policy expert, dives into the complexities surrounding the New Deal and its actual impact on the Great Depression. He reveals the surprising lack of effective fiscal stimulus and critiques Roosevelt’s gold revaluation strategy. Selgin discusses the profound effects of regime uncertainty and how missteps in policy led to the 1937-38 recession. With a humorous twist, he also shares anecdotes about his life in Spain, including a fractional-reserve donkey ownership scheme that highlights his whimsical yet insightful approach to economics.
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Regulation, Not Fractional Reserves, Broke Banks
- Pre-1933 U.S. instability owed more to restrictive regulations than fractional-reserve banking itself.
- Modern deposit guarantees have changed incentives, making bank freedoms riskier due to moral hazard.
Free Banking Would Limit Over-Concentration
- Without guarantees and with free entry, banking would likely be less concentrated than in heavily regulated systems like Canada.
- Small banks would still persist because they serve niche specialties.
Quantity Theory Misunderstood, Not Dead
- The quantity theory is often misapplied because velocity and money demand change with innovation and expectations.
- Broad historical correlations existed but modern financial changes weaken the relationship.
