Over at Bloomberg News (see here) there is a very informative piece about heretofore unrevealed actions taken by the Federal Reserve to shore up the financial system during the Great Recession. The information is raising many new questions and I suspect these questions will lead to more arguments. However, one of the observations that shouldn't get lost is that the findings make clear just how dire the economic and financial situation was in 2008. And this is an important point given that many still claim that "everyone" should have been allowed to fail (along with the other increasing popular - and in my review ridiculous - claim that the government should do nothing in such situations).
And along these lines, take a look at the profile of the two economists (Christopher Sims and Thomas Sargent) who recently won the Nobel prize that appears in today's New York Times (see here). In particular - again, for those who appear completely ignorant of the history of economics (many of whom a running for president) - see the following quote from the piece:
Conservative voices, like the editorial page of The Wall Street Journal, have claimed them as their own. The men’s work on economic cause and effect and the theory of rational expectations — which maintains that people use all the information available in making economic decisions — proves that Keynes had it wrong, these commentator say.
It would be a provocative thesis — if it were true. But Mr. Sims and Mr. Sargent say their work is being misread. Both, in fact, are longtime Democrats who maintain that government can, and should, play a role in economic affairs. They stand behind many recent policies of the Obama administration and the Federal Reserve. They even have some ideas about how European governments might defuse the running crisis on the Continent.
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