Tyler Cohen - Says Monetary Policy is the Bigger Issue
In short, expansionary monetary policy and wartime orders from Europe, not the well-known policies of the New Deal, did the most to make the American economy climb out of the Depression. Our current downturn will end as well someday, and, as in the ’30s, the recovery will probably come for reasons that have little to do with most policy initiatives.Think Progress of Course calls George Will out as well. and Krugman has been saying for a while that a new new deal is needed. (Update: TPM Weighs in)
My opinions is pretty clear. The problem is demand. So, of course, the government cannot do enough to stimulate demand, but we need to do as much as possible. And, in the long term, we need to win the war for green energy innovation just like the cold war led to our leadership role in the technology revolution.
But Last weeks Krugman vs George Will smackdown still takes the cake for political entertainment.