What I Learned From the Crisis
19th November 2010
Bryan Caplan bares his soul. Sort of.
At yesterday’s lunch, Tyler asked us to name the most important lesson we learned from the crisis of 2008. My answer: The Fed is much worse than I thought. I used to think we could trust an economist of Bernanke’s caliber to deliver tolerably good macro performance using inflation targeting – and avoid giving barbarous politicians the excuse to push bailouts and “fiscal stimulus.” Instead he threw his own principles to the wind, joined the sky-is-falling chorus, and helped end the Great Moderation.