"Professor [Steve] Hanke argues that the chief enabler of both the Great Depression and our latest economic downturn is the [Fed], who sees itself as America's systemic risk regulator. This is the world upside down, Hanke explains: The [Fed] is the systemic risk. ... The bottom line is that the idea that government bureaucrats have enough knowledge to manage an economy well is the height of conceit--what Nobel Laureate Fredrich Hayek called the 'fatal conceit'," Walter Williams (WW), 5 November 2009, link: http://frontpagemag.com/2009/11/05/economic-myths-and-irrelevancy-by-walter-williams/
Does anyone remember JFK's adminstration and the Phillips Curve? We conquered the business cycle then! The economists here are still looking for the philosopher's stone. They are wasting their time. If they studied the Austrian Theory of the Business Cycle, they might learn something. This is pitiful. Where is George Stigler when we need him? That Lucas, a Chicago professor, should sprout this nonsense is inexcusable. Did he study the History of Economic Thought? It appears Geanakopolos has no concept of capitalization. He doesn't understand the efffects of central bank monetary base expansion on bank lending practices. This search for the "new paradigm" is an intellectual joke, see my 23 August 2007 post: http://skepticaltexascpa.blogspot.com/2007/08/alchemists-at-work.html. To end business cycles, kill the Fed. New thinking? That's laughable. Go back to gold!
I agree with WW, an economics professor at George Mason University.