The core of that sentence, taken as one piece:
"They believe that we can soften the blow from the current recession, then continue seeking the most growth possible."
Taking that whole sentence, the argument is that:
1) An artificial boom is promoted by seeking unlimited growth
2) A prolonged and deeper bust is created by trying to soften the fall.
It's like free-market growth without free-market correction when the market dictates it.
I don't agree with Keynesian interest rate manipulation, and I don't agree with monetarist money supply manipulation. Both of these are the key tactics being used in the economy right now and I think they will prove detrimental. I agree with Keynes on many things (including investment in infrastructure) but I believe that long-term growth and sustainability is more likely from, say, von Mises.
I agree with you on the monetarist, simply because the fundamental question. "What is money?" Cannot be defined, nor counted. We do not have the ability to count all the money.
Keynesian...depends. New or Classical (there are differences).
The two things cannot be supported because of the difficulty in determining booms and busts. For instance, the stock market boom in the late 1990s, was it artificial or real? Furthermore, can the government know when there are booms and busts. The short answer is "No". No one can...and trying to creates a problem know as the "Time Inconsistancy Problem" -- If you can find it in wikipedia, I can dig up the Nobel Prize winning lecture.
The problem I have with von Mises and all of Austrian Economics is that it doesn't play into reality. In order for something along those lines to actually work, it would requre such a huge paradigm shift that I don't believe is possible.
As for those who seek to abolish the Fed, what would you replace it with? Monetary Policy conducted by legistlatures do not have a very good track record. I use the analogy of the current Fed problems with the over-use of antibiotics. In the past, interest rate manipulation (or now what we use known as they Taylor Rule) worked. It worked because the Fed was credible. As the Fed loses is credibility, it's ability to influence the market weakens. It is as if the market is unafraid or immune to the Fed. However, because the Fed only had a few tools, it had to invent some (TSLF, for example). Those are proving ineffective in current conditions. I believe in a strong central bank for the conduct of monetary policy because the data indicates that is the best thing. Is it perfect? No. Is it good? Not so much. But like democracy, it's the best thing we thought of so far. Like scientists who try to control the newest superstrain of bacteria, those influential in monetary policy must attempt to control the markets.
