04 Feb 2009

Top Economist: "I Think the Government Needs to Get Serious and Nuke the Economy"

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OK no one has said that just yet, but it’s surely coming. We’ve got Frederic Mishkin assuring us that the Fed has plenty of “ammunition,” and we’ve got Martin Wolf calling for governments to use “overwhelming force” because the time for “shock and awe” in policymaking is now.

Even when somebody comes out against some of the madness and opposes a bank bailout, one of the reasons is that it “Consumes considerable resources, thus competing with other, in many cases better, uses of fiscal firepower.”

Here’s an idea! Rather than write op eds and blog posts about where the Treasury and Fed should shoot the economy, maybe these experts ought to advise the government to lay down its weapons and leave market prices alone.

Why is the war metaphor so popular? Did “shock and awe” achieve the long-term objectives the last time it was used? Wolf might as well say, “It’s time to go Waco on the unemployment rate.”

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