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Friday
Nov282008

Lessons from The Great Depression--Part 2

Keynes or Friedman? Monetary policy became an impotent tool, or the Fed caused The Great Depression by not expanding the money supply enough fast enough and rescuing banks? Paul Krugman points out that in the current crisis the Fed and Treasury have been aggressively implementing the Friedman cure, and it isn't working.

I hope Obama's economic policy team can get beyond this academic cat fight, recognize that neither Keynes nor Friedman nor any other economist has the whole "truth" about this, and make some sound pragmatic judgments--and be ready to adjust based on results and changing circumstances. 

Part 1 is here.

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