- The Wall Street Journal had an editorial on the 24th laying the blame for this present crisis squarely at the feet of government and specifically at the feet of the Federal Reserve. The piece blames the housing bubble on Al the Banker Greenspan’s cheap money from early in the decade and the oil/commodity bubble on Bernanke’s helicopters.
The original bubble was in housing prices and mortgage-related assets, which the Federal Reserve helped to create with its negative real interest rates from 2002 into 2005. This was Alan Greenspan’s tragic mistake, not that the former Fed chief will acknowledge it. Testifying before Congress yesterday, Mr. Greenspan pinned the crisis on mortgage securitizers, risk modelers and lending institutions, thus contributing to the Washington narrative that government had little to do with it. The Fed’s monetary policy apparently gets a pass. The media and Members of Congress will use Mr. Greenspan’s testimony to impugn the very free market principles that the former Ayn Rand protégé has spent his life promoting. It was a painful spectacle to watch.
Read the whole thing and remember that you read it here first. And also note that they fail to note the role of the Fed’s bubble bursting too tight, for too long monetary policy of 2005-6. Almost as much a problem as the easy money itself is the whipsaw action of fast and furious Fed movement that fails to allow time for rate changes to actually percolate through the economy. Via EclectEcon.
- On that final point, it’s not merely the Fed that is entirely too impatient. The worst threat to the economy at the moment is the fear mongering of Henry Paulson, Barney Frank, Ben Bernanke, Chuck Schumer and other politicians. The new home sales numbers came out today and, like the existing home sales reported Friday, the numbers were up. These are the September numbers, so this means that enough mortgages closed to increase the number of existing home sales at precisely the time that politicians were saying home loans wouldn’t be available because of some illusory credit crisis on “Main Street.” The existing home sales numbers are above year ago levels. The housing market has fairly well adjusted, but the politicians are bound and determined to push it lower with their apocalyptic hyperbole.
- Remember a few months ago when liberals were calling for the heads of some State Department contractors who peaked in the passport files of Barack Obama and Hillary Clinton out of curiosity? Turns out that people in several Ohio state and local agencies got right on their computers to find dirt on Joe the Plumber. From The Columbus Dispatch
Information on Wurzelbacher was accessed by accounts assigned to the office of Ohio Attorney General Nancy H. Rogers, the Cuyahoga County Child Support Enforcement Agency and the Toledo Police Department.
It seemed like the liberal media were awfully quick to dig up “dirt” like Joe’s real first name and apparently the liberal media had help from liberal bureaucrats. I wonder if the “journalists” involved would have been capable of figuring out the big scoop that his first name was really Sam if somebody at the Toledo Police Department hadn’t fed them the information?
Via Cato at Liberty.