Greenspan Is to Blame for Today's Problems

by: Bill Conerly posted on: October 12, 2008 Last night Mrs. Businomics and I were doing things we hardly ever do. I was admitting that I had been wrong. She was agreeing with me. Then I went to read some blogs and I found Brad DeLong saying exactly what I had been thinking, which is also fairly unusual. The subject: we economists have been wrong about monetary policy and asset bubbles. Back in the old, old days, like the 1980s, we had all become monetarists. Professor Friedman taught that money supply growth rates should be stable and low. Then financial deregulation, sweep accounts, and other innovations made the money supply numbers hard to interpret. So we economists looked at inflation, and the gap between actual output and potential output, to assess whether the Fed was being loose or tight with monetary policy.... [read full story]