Bubbles

Krugman: "So what happens if the housing bubble bursts? It will be the same thing all over again, unless the Fed can find something to take its place. And it's hard to imagine what that might be. After all, the Fed's ability to manage the economy mainly comes from its ability to create booms and busts in the housing market. If housing enters a post-bubble slump, what's left? [NYT]

Friedman: "Shut it down. Just shut it down.

I am talking about the war-on-terrorism P.O.W. camp at Guantánamo Bay. Just shut it down and then plow it under. It has become worse than an embarrassment. I am convinced that more Americans are dying and will die if we keep the Gitmo prison open than if we shut it down. So, please, Mr. President, just shut it down." [NYT]