The Fed learned its lesson after the Great Depression and it’s applying those lessons to the current financial crisis. The only trouble . . . it’s a different crisis. Brian Carney* of the Wall Street Journal interviewed Anna Schwartz, co-author with Milton Friedman, “A Monetary History of the United States” (1963), and she tells us why the current strategy won’t do much good.
Today’s crisis isn’t a replay of the problem in the 1930s, but our central bankers have responded by using the tools they should have used then. They are fighting the last war. The result, she argues, has been failure.
Read Bernanke Is Fighting the Last War – WSJ.
*Yes, Brian Carney is John Carney’s brother.