The Austrians (including me) who predicted these problems based on Greenspan's low-interest-rate policy know of course that the main cause was that low-interest-rate policy, with his numerous bailouts of failed financial institutions also creating a moral hazard that encouraged risky behavior.
As always, the little guys are told to give up their way of life to preserve the high-paying jobs of corporate and union executives — along with the jobs of people who make cars no one wants to buy.
The Federal Reserve should not make a credible commitment to future inflation as a means of stimulating aggregate demand. The Federal Reserve should instead reverse its low-interest-rate policy before it increases the level of discoordination in the economy.
1998 Mises Institute Supporters Summit, Palm Springs, California; February 27-28, 1998.
Recorded at the Toronto Stock Exchange; September 16-17, 1999.
"As long as our central government has the ability to dole out these favors, there will be special interests lining up to receive them."
I feel confident in claiming that the housing boom would not have occurred if money and banking had been left in the hands of the private sector, as opposed to the state-organized cartel that we currently "enjoy."
We should not be afraid of deflation. We should love it as much as our liberties.
