[The Ghost of Championship]

Originally Posted by mcsluggo

Milton Friedman was teh founder of the monetarist school of economics. In one of his seminal papers (written with his eventual wife) he proposed that the major cause of the Great Depression (the 1930s one) was a failure of the central banks of the time to have an appropriate monetary response to the original shock to the economy (the stock market crash and subsequent bank pressures). The money authorities at the time were very worried about the health of the banks, and about widespread bank failures, and their response was to increase the reserve requirements imposed on banks. This had the effect of severely cutting back money supply, just as the economy was contracting, ---leading to the the economy contracting even more, and for an expanded period of time---- voila, recession becomes great depression.

Bernanke was tipping his hat to that seminal paper. Every single economist in the country reecognized this fact... it is entirely uncontroversial. (Bernanke did not take the next ste and agree with Uncle Milty and the monetarists that Monetary Policy failures were the root cause of all economic fluctuations)

Holy shit! there are two people here who don't have a backwoods interpretation of money? This has never happened in the history of the interworlds.

Originally Posted by mcsluggo

you seem to be implying that you have made a deeper interpretation of this point somewhere else in this thread... but I am unable to find it.

I could be wrong but I think r's only point was an attack on my flippant faith in the Fed "savior", which is very valid.