Liberty vs. Leviathan

Chronicling Liberty's battle against Leviathan

Bernanke Still a Student

In 1963, Anna Schwartz co-authored with Milton FriedmanA Monetary History of the United States“, in which they made the case that the Great Depression was caused by tight monetary policy. It’s a work that Ben Bernanke often praises in his public speeches, citing the lessons learned from it as a basis for all the recent banking system liquidity infusions.

In an interview published by the Wall Street Journal over the weekend though, Schwartz schools Bernanke in one sentence, reminding us that in regards to today’s crisis “…to assume that the whole problem is inadequate liquidity bypasses the real issue.”

She doesn’t let Alan Greenspan off the hook either, saying that he hasn’t provided “…an adequate kind of response to those who argue that absent accommodative monetary policy, you would not have had this asset-price boom.”

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