It is perhaps fitting that Bernanke used the occasion of Milton Friedman’s 90th birthday to assume institutional responsibility for the Great Depression. He said: “I would like to say to Milton and Anna: Regarding the Great Depression. You’re right, we did it. We’re very sorry. But thanks to you, we won’t do it again.”

He meant it. He won’t.

Meanwhile, the Swiss are not amused (why do they hate us?):

Swiss central bank chief Jean-Pierre Roth sharply criticised the US economic system in an interview published Sunday, after the home loans crisis that caused turmoil on world financial markets.
…
The economic climate in Europe was “robust”, while Asia remained “dynamic”, he added.

“There are certainly some question marks now surrounding the development of the American economy,” Roth said.

Dinocrat: This account suggests a less planned and more improvised approach to the situation than we have inferred from some of the circumstances. One would like to think that the Fed has a game plan to stay ahead of events.

Laura Tyson does not provide reassurance in this regard:

…Chairman Greenspan said that central bankers were like drivers of a fancy new car whose mechanics they did not understand. When the car broke down and they looked under the hood, they didn’t know how the new system worked. But they did know their responsibility was to get the car running again even if they had to do some unintended damage in the process. Many critics still argue that the Fed’s dramatic monetary easing in 1998 inadvertently laid the foundation for the stock market bubble of 1999-2000. I disagree.

(HT for the above links: TheStreet.com.)

(After praising the wisdom of the government, Tyson points an accusing finger at hedge funds:

Once the turmoil has subsided, the Federal Reserve should look under the hood once again to try to figure out exactly what went wrong with the mechanics of the global financial system this time around. Based on what we know now, it is a good bet that hedge funds played a major role and that tougher reporting requirements and supervision of their activities are warranted to enhance the access to reliable information on which wise investment decisions depend.

Hm. The hedge funds are not vestal virgins, but they trade the toxic mortgage instruments; it’s the big investment banks that design, fabricate and disseminate them. Surely it’s just a coincidence that disinterested academician Tyson is a Morgan Stanley director; surely it’s just a coincidence that someone on the political make for a putative Democratic administration would probably get herself blackballed by taking on the investment banks.)