“The root cause of the current economic crisis is the failure to deal effectively with unaffordable loans and unnecessary foreclosures,”
By Daniel at 18 November, 2008, 3:24 pm
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Actually, the root cause of the current economic crisis is the failure of wages to keep up with asset inflation, in turn caused by wage arbitration in combination with deeply flawed measurements of ‘inflation’ as ‘CPI’ instead of money supply, leaving interest rates artificially far lower than they should have been and encouraging the uncontrolled expansion of credit with accompanying asset inflation.
A combination of effects that has left the consumer vastly overextended and unable to carry the accumulated debt. A toxic mixture whose creation can be blamed solely on the federal reserve and its misguided attempts at ‘monetary policy’.
Did anyone catch Bair mentioning she would reward lenders $1000 per refinancing? Why reward those for fixing the mistake they made? She calls it a “shared loss” owned partly by the bank and partly by the government (aka our taxes). I call it a total loss.
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