This Will Be Almost as Hard to Teach as the Macroeconomic Policy of Herbert Hoover

Greg Ip on how the entire U.S. government is acting as though we are at 5% unemployment, not 9%:

Regulatory and credit policy: Procyclicality everywhere: FISCAL austerity in a time of near recession is a bad idea when monetary policy is helpless as Brad DeLong has been pointing out for oh, several years now. Let’s broaden this debate about procyclicality beyond fiscal and monetary policy. As we saw during the crisis, both regulatory policy (forebearance) and credit policy (bail-outs and...