Opinion of Monetarism

[Southern Senator North Carolina Yankee]

Although I have used the term at times to describe myself, I do however find that it or any economic philosphy is not always going to provide all of the answers to every problem from a political standpoint. From an economics perspective I think that Monetarism is gets it wrong that Inflation is caused 100% by increases in the money supply as other factors can effect and cause inflation such as rapid changes in the supply of crucial product could cause inflation in a recession. But to an extent some of its arguements are correct. Especially the importance and impact of monetary policy on economy. I would argue the acts of the Fed to expand the money supply, had more impact in stablizing the banks, and creating the overal economy, then did Tarp, or  the Stimulus. Not to say that we shouldn't have had one, but you reach a point where monetary policy is ineffective and saving a few more points on the 10 or 30 year rate, really isn't going to do much more to help overall output. At that point, in a situation like the present, more answers are required at the micro level to solve outstanding issues like oversupply of housing, cars, structural shifts in employement, etc etc.