Quote from Martinghoul:
I appreciate the sentiment, trefoil, but I think the "bone up on economics" comment wasn't addressed at me, but rather at 5yr.
In general, I think that the Fed (as well as other central banks) does need to accept some of the blame for the housing bubble. However, it's beyond silly to blame the Fed for all the world's ills. There's the fundamental demographic shifts, the deregulation of the financial sector and, last but not least, global imbalances that caused a massive mis-allocation of resources (which is what you're alluding to). These things don't have anything to do with the Fed. In fact, didn't Ron Paul himself place some, if not most of the blame, for the housing bubble on the GSEs, rather than the Fed?
I am, honestly, rather fed up with people trivializing this complex issue. It's beyond silly to claim that it's all the Fed's fault or Reagan's fault or Greenspan's fault or any such bollox. I suppose it's just a human trait, i.e. we're, on aggregate, inherently lazy, stupid and chock-full of attribution bias. That means we love simple explanations and don't like to think about things too hard. Also it means it's never one personally who's at fault, it's always some other guy who f*cked it all up. All this makes me very pessimistic about solutions going fwd, especially in America, but I think I said that already somewhere else.
