The Austrians are right to condemn the fractional reserve policies that caused MZM to get so big. But the only thing the Fed can do now is to printing money to

The Austrians are right to condemn the fractional reserve policies that caused MZM to get so big. But the only thing the Fed can do now is to printing money to make the two match, and then make sure it never happens again. To even have that discussion, there has to be acknowledgment from academia & the Fed that their policies led to this. Right now, the intellectual climate is far, far from any such acknowledgment. In fact, the Nobel for Krugman signals exactly the opposite. It has conferred on him a degree of economic credibility (and perceived infallibility) that, frankly, he does not deserve - that was the point of my post. Without that Nobel prize, he was easy to ignore as just-another-commentator. Not now. Yet another Keynes quote seems appropriate, why this debate is important: The ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed the world is ruled by little else. Practical men, who believe themselves to be quite exempt from any intellectual influence, are usually the slaves of some defunct economist. Madmen in authority, who hear voices in the air, are distilling their frenzy from some academic scribbler of a few years back.