I am arguing in favor of the proposition, “By intervening to regulate business and financial risks, governments have made things worse.” To vote for me and for less regulation, go to the site, http://www.economist.com/debate, register (registration is free), and cast your vote as “PRO.” Voting continues all through today, and will cease tomorrow at an unspecified time.

The voting is neck and neck. I am now winning 52 to 48 percent, after being down earlier this week 47 to 53 percent. Every vote counts for the free-market to squeak out a victory in these challenging times when much of the media is blaming deregulation for all the ongoing financial woes.

Today, after being attacked by three “featured participants” arguing for an ever-expanding regulatory state, I finally get an ally among the guest commenters. Thomas Firey, managing editor of the Cato Institute’s magazine Regulation, writes a masterful refutation of the nostalgia among the commenters for New Deal banking regulations.

“Let us consider just how well US banking regulation ‘worked’ in the post-war period,” Firey writes. “[T]hroughout the post-war period, costs to borrowers were much higher than they are today. Since the banking deregulations of 1980-91, terms for both depositors and borrowers have improved greatly.”

Firey also argues that while stricter lending regulations may have benefitted the lenders and borrowers involved in the 1 million subprime loans now in default, “what of the other 5 million subprime loans that are in good standing, most of which have provided people with homes that they otherwise could not have purchased?”

I make many of the same points in my “Closing Statement” that was posted yesterday. “Indeed, when looked at in terms of distribution, the housing boom’s benefits may have been even more widely dispersed than those of the tech boom,” I argue. “Nearly 70% of US families and close to one-half of American black and Latino families now own the homes in which they live.” I remind readers that the overall foreclosures, while numbering in the millions in correspondence with the dramatic increase in the number of homeowners, is still only 2.04 percent of all mortgage loans.

I argue that while some volatility is the price we pay for a dynamic economy that improves everyone’s standard of living, “volatility can be much reduced through the introduction of what we should call a second stage of deregulation. Let us deregulate private risk management, as we have risk-taking, for ordinary investors as well as hedge-fund fat cats.”

As an example, I propose lifting restrictions that make it difficult for mutual funds to short stocks and other securities. Allowing mutual funds to engage in the same strategies as the smart hedge funds that shorted subprime loans would bring gains to middle-class investors and would have sent a stonger signal to the markets that something was wrong with mortgage securities.

Appreciate any feedback or suggestions from Open Market readers on deregulating risk management. In the meantime, make your freedom-loving voice heard today in the Economist debate!

Mitt Romney chose his CPAC speech on Thursday to announce that he was suspending his campaign. That made McCain’s speech later that afternoon one of rallying conservative support for the GOP frontrunner, rather than persuading conservatives to support him over other primary candidates. There was much media attention on conservative reaction to McCain’s almost-certain clinching of the GOP nomination.

But overlooked in the media was the broad policy focus of the conference. In CPAC sessions and its exhibitors’ booth, the conference featured a broad array of public policy topics of interest to the center-right coalition. There was also a healthy debate on different points of view within the coalition.

Yes, there were some odd topics among the exhibitor. But there were also some overlooked groups from outside the Beltway that had powerful messages. From my hometown of Kansas City, Mo., America’s Majority Foundation made the heartland conservative case for why more immigration benefits America’s economy and culture. Law Enforcement Against Prohibition gave some cops’ perspectives on why the Drug War is a failure, and how drug legalization would reduce crime and let police focus on real criminals.

There were also panels on everything from the failure of gun control in Great Britain to the overcriminalization of white collar crime. All in all, CPAC provided a good chance for conservatives to rejuvenate from the fountain of ideas, whatever happens in 2008.

While I didn’t agree with him on much beside the evil of communism, I did have the pleasure of witnessing one of his last controversial episodes, during his speech at the dedication of the Victims of Communism Memorial in Washington, D.C. in June 2007, where he caused a small row with Germany when he blasted former Chancellor Gerhard Schroeder, calling him a “political prostitute, now that he’s taking big checks from Putin,” and quipped that “the sex workers in my district objected so I will no longer use that phrase.” Former French President Jacques Chirac came in for some verbal abuse as well. Whatever one thinks of the Iraq War, it’s always fun to watch politicians tear each other down. RIP.

What’s overlooked, I believe, in cases like this with customers supposedly “captive” to service providers, is the power of branding. Were there no fare regulation, a customer wouldn’t necessarily be at the mercy of every unknown cab driver.

Rather, companies would spring up with visible slogans they would emblazon on their cab. Consumers would know — from sources ranging from the Internet to word of mouth — approximately what fares a particular cab company or franchisee would charge when they saw them driving by on the street. It’s the same concept that fast-food restaurants and motel chains rely on for drivers on car trips who don’t have time to search around a particular town for a place to eat and sleep.

And in this case, I don’t need to point to theory, because this is exactly what happened in the early days of taxis, with the familiar “Yellow Cab” franchise. In 1907, entrepreneur John D. Hertz, who would later found the rental car company, took his excess vehicles from his Chicago car dealership and painted them the visible color of yellow. According to this article on the web site of the University of St. Francis, “Since the other taxicabs were too expensive for the average person, John made his taxicabs accessible for everyone by lowering the rates. He also told the public that his taxicabs could be wherever they wanted them within ten minutes.” By the ’20s, Yellow Cab had gone national.

So the market already had this problem worked out when cars were barely on the road. To make the taxi business again a stepping stone for the John Hertz-like entrepreneurs of today, we just need to go “back to the future.”

Suffice it to say, the Smithsonian Institution is not buying into the “global warming” hysteria being spread by Al Gore.

While in the District in recent days, professor Jeff Bennett of the Crawford School of Economics and Government at Australian National University toured the Smithsonian’s National Museum of Natural History, where he snapped photographs, since forwarded to Inside the Beltway, of two displays that caught his eye — both dealing with climate change and “the Future.”

“Initiation of glacial conditions may be triggered by surprisingly rapid climate changes,” reads one display. “Therefore, the minor global-cooling trend of recent decades … is being carefully watched and studied.”

Global-cooling trend?

Explains the next display: “the period 1890-1945 A.D. was abnormally warm, and there have been signs of cooling in the last few decades.”

Perhaps we should organize a field trip to celebrate this unexpected evenhandedness. While we’re on the Mall, we can even pick up a copy of The Dangerous Book for Boys and score a double victory against the PC enforcers.

How can I prove that Google caused this addiction? Here I am playing Rock Band with Jillian Bandes of Roll Call in Google’s game room.

Jill’s fake drum performance far exceeded my abilities at the fake guitar. Soon after this photo was taken a tech from Google’s New York offices schooled us on how to rock Rock Band and scored a 97% on a much more difficult setting. Thanks to Adam Kovacevich at Google for featuring my silly performance on Google’s policy blog.

On a more serious note, I’m looking forward to working with Google on some of the policy issues that we’ll likely confront in the coming year. CEI is of like minds with the monolith of Mountain View on issues like privacy and competition policy. But we also disagree on policies like network neutrality and the best way to liberalize spectrum in the U.S.

Google is a great company that has created an enormous amount of wealth. I hope that their DC offices focus on creating a freer market for them to operate within and that they move away from the standard Washington favor-seeking.