Krugman LIES Outright: Banking

This is an outrage.

Yglesias tells us that some Occupy Wall Street protesters have picked up Ron Paulish monetary ideas — although some know better. I thought I'd say a word about one particular idea that sounds plausible to some people but is actually quite wrong: banning fractional reserve banking. I know that's a popular theme among some Austrians. But it's actually neither a good idea nor even feasible. The crucial thing is to understand what banks do. And it's not mostly about money creation! Instead, what banks are for is helping to improve the tradeoff between returns and liquidity.

That's a very quaint notion. But were it true there wouldn't be any such thing as... Read the full analysis here.