Commentary by Amity Shlaes
Nov. 19 (Bloomberg) -- Every crisis has its heroes. For months now we've all been hearing about Walter Bagehot, whose 19th-century injunction to lend ``freely'' in a panic was cited by the Federal Reserve in its bailouts.
Now another Englishman, John Maynard Keynes, has been pulled on the stage. Keynes taught that spending, especially spending by consumers, is the way out of a slowdown. From last summer's small stimulus checks to the infrastructure projects under consideration by President-elect Barack Obama and congressional Democrats, almost everything the government has done or wants to do is justified by Keynes.
That's problematic. For Keynesian solutions often fail to deliver good or even acceptable results.
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