"Mind-Boggling Nonsense"

Here's one more for Brad's list:

Mind-Boggling Nonsense from John Cochrane, by Economics of Contempt: After reading John Taylor and John Cochrane's analyses Lehman's failure, I'm beginning to understand how it's possible for economists to say that "we're still arguing about the causes of the Great Depression." It's generally hard to come to an agreement when one side simply lies, or refuses to acknowledge undeniable facts.

I've already dealt with John Taylor's ridiculous claim about Lehman's derivatives counterparties. John Cochrane's "analysis" of Lehman's failure is equally fictitious...This is just mind-boggling nonsense. It's genuinely frightening that a prominent professor of finance can be so utterly clueless about modern financial markets. ... [gives reasons why the analysis is wrong]

John Cochrane and John Taylor are both prominent economists, and they will no doubt convince legions of starry-eyed grad students that Lehman's bankruptcy was really only a minor event. John Taylor, at least, will no doubt also convince these grad students that the real problem was the government's handling of the bailout. And 80 years down the road, economists will be saying, "We're still arguing about the causes of the Financial Crisis of 2008."