It is hard to figure out what Greg Mankiw think about what Ms. Schwartz has said in "An Interview with Anna", but it is easy to see what Brad DeLong thinks about it. It sounds like that Ms. Schwartz wants the market economy to work and she would like to see the garbage cleaned out in the system and a newly established economic order. For that to happen, the economy will have to work into the long run, in which we are all dead, said by Keynes and recalled by Paul Krugman recently. I also have to say that Ms. Schwartz may be too harsh on Bernanke, since we basically gave Ben some knives/axes for dealing with a nuclear bomb and even he didn't hesitate to make his own tools, we still don't know whether he will achieve the ultimate success. After all, Friedman and Schwarts only told us what monetary policy did not work in dealing with a depression but nobody has outlined a set of policies that are guaranteed to work in preventing a imploding economy falling into a recession/depression.
The basic point is still that the American people should trust neither market economy or the government, and the economy need oversight, the government need check and balance, and the national need to do some serious long-term planning, before it turns its focus back on to the celebrities. For that to happen, we probably need a reform in the regulation of the media industry first to encourage competition and free speech.
As the turn of the administrative branch approaches closer, a really important thing to do is to send both candidates' choice of secretary of the Treasury to Washington to start their on-the-job training now. The crisis is not over yet.
Magnus: China Must Reform or Bust - China's debt markets are looking more and more like the West, circa 2007. And it's not clear the government can intervene as successfully.
1 hour ago