The dithering Chicago school [of economics] has proved wrong time and time again. They have no alternatives or excuses for the boom/bust cycles they categorize as inevitable.
The Volcker scenario worked well during the Reagan years, but we live in a different financial world now, and there is no going back to that other time. A return to a tight money policy at this moment would be disastrous, and at least in the short come, a job killer.
While they may have taken some measures that stink, but we live in a Bernake/Summers/Geithner world. These men understand our dilemmas and have the best chance for fixing them.
Concern over the deficit is understandable, and interest rates cannot and will not remain at the current low level, we will only grow our way out of the current problem by putting more people to work, i.e., investing.
As for fears over our currency, have you noticed every time there’s a rumble anywhere in the world, the flight is to dollars? While the time when the dollar falls out of favor may come, that time is not now. Nor is it in the best interests of the Chinese to do damage to their most important trading partner. Again, the time may come when that is not the case, but that time is not now.
