Harvard economics professor and Nobel laureate Eric Maskin:
The sort of economics that deserves attack is Alan Greenspan's idealized world, in which financial markets work perfectly well on their own and don't require government action. There are, of course, still economists – probably fewer than before – who believe in that world. But it is an extreme position...
Mr. Greenspan may have thought that at one point, but he spent most of his career as a government actor. So Mr. Greenspan is a bit of a straw man here. Maskin goes on:
There's a danger of overdoing the regulation. You don't want government micromanaging financial institutions. Government is not particularly good at that, and it's likely to stifle good investment that would otherwise occur. So we'll have to strike a balance, which government is not always good at doing.
Link via Mankiw.
