T,
I agree with you 100%.
IMO, the saddest part of the Greenspan era is that he gave us the perfect opportunity to see all the flaws in our fiat/fractional reserve monetary system, but many people learned absolutely nothing. He's still highly regarded by most people and "Helicopter" Ben is seen as the bad guy.
IMO, that's because most people don't understand our system, are "short term" thinkers, and don't follow the story over a 10-20 year period so they really understand what's going on. Economics is inherently very long term, but people think in terms of "this year".
It gets even worse when politics gets dragged into it because some percentage of the few people that actually understand what's going on are willing to become extremely intellectually dishonest to protect "their party and candidate".
That's why I thought Ron Paul's campaign was so important for the country. He was the only candidate that wasn't a complete moron on the subject. I'm sure he stimulated a lot of young people out there to educate themselves about the monetary system on libertarian web sites like Mises.org, LewRockwell.com etc....
To be quite honest, I'm not sure what Ben should have done though. He took over a disaster waiting to happen.
Personally, I think he should have remained tougher, allowed the banks and brokers to continue slowly writing down assets and raising new capital (crushing the shareholders, but they deserve to be crushed), and dealt with the recession and bear market. The problem is that the deflation of assets and the resultant loses may have gotten so out of hand, we might have seen the second "big one". It's a tough call, but I wouldn't have lowered rates as much as he did. He's practically begging for a currency crisis if he loosens any more. |
