David Leonhardt used his column today to tell readers that bubbles in the form of over-valued stock or housing markets are bad news. As we say here in the nation's capitol, better late than never. Unfortunately, Leonhardt does not make the next step and discuss whether the Fed should follow policies to prevent bubbles from growing to the point where they cause so much damage. That would seem to be the obvious implication of his column, but it would imply a radical shift from the current "bubbles are fun" view at the Greenspan-Bernanke Fed.
--Dean Baker
