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.

Update on Friday, November 28, 2008 at 09:32PM by Skeptic

In a mashup of Keynes and The Shadow, Krugman says—

[T]he the only important structural obstacles to world prosperity are the obsolete doctrines that clutter the minds of men.

OK, I’m ready to move on if you are.

Update on Saturday, November 29, 2008 at 11:28AM by Skeptic

Sorry, but I had to mention that Greg Mankiw has gone more or less competely over to the Keynesian side.  Since he was formerly economic policy advisor to President Lame W. Duck and to Mitt Romney, it seems we have enough of a consensus about the need for fiscal stimulation of the economy that we can just get on with it.