Quote of the Day

The Great Depression was originally thought to be due to the inherent instability of capitalism. Later Friedman and Schwartz blamed it on a big drop in M2. Their view is now more popular, because it has more appealing policy implications. It’s a lot easier to prevent M2 from falling, than to repair the inherent instability of capitalism. Where there are simple policy implications, a failure to do those policies eventually becomes seen as the “cause” of the problem, even if at a deeper philosophical level “cause” is one of those slippery terms that can never be pinned down.

- Scott Sumner