More used-up monetarist "debating" speeds to nowhere, except hell

Today's Washington Post headlines "Will America come to envy Japan's lost decade?" Unfortunately it's just more of the same monetarist tripe...

My rebuttal follows:

This whole line of monetarist thinking, on both putatively liberal and conservative sides, completely and tragically misses the boat. No amount of manipulation of mere money, in whatever form, will prevent economic collapse. Why? Because the issue is the multi-trillion (or better quadrillion) speculative bubble in sundry and assorted so-called derivatives. This whole "bucket shop" monetary cancer was unleashed from a proverbial Pandora's box when Nixon pulled the plug on Roosevelt's Bretton Woods gold reserve mechanism to settle trade imbalances among nations. This led to a speculative arbitrage orgy in currencies a la the so-called carry trade. Later when the last vestige of that same Roosevelt era anti speculative Glass Steagall legislation was extinguished by the machinations of Larry Summers, et al, during the Clinton administration the doors were flung open to the current debacle. Without forcing this mass of speculative funny money through bankruptcy and returning to a credit system based upon long term survival of nations via productive investments in infrastructure, energy, water, industry and agriculture, everything else is mere whistling past the graveyard to the tune of London and Wall Street. Krugman, and his monetarist brethren, understanding less than nothing of how a physical economy functions, of course will have none of this. (They can only argue to blow up a bubble further, which just feeds the cancer.) But it is the only cure.