From brad delong: I dub thee THE LAST WAR SYNDROME: ‘Everyones fighting the last war!’
Is 2008 Our 1929?
No. It is not. The most important reason it is not is that Bernanke and Paulson are both focused like laser beams on not making the same mistakes as were made in 1929.
They are also focused, but not quite as much, on not making the mistakes made by Arthur Burns in the 1970s.
And they are also focused, but not quite as much, on not making the mistakes the Bank of Japan made in the 1990s.
They want to make their own, original, mistakes…