Comment

Comments and observations on social and political trends and events.

Sunday, October 12, 2008

Federal Reserve and the financial crisis: "Coin in the fuse box"

Much of the commentary from the free market economists has centered on the role of Fannie Mae, Freddie Mac and the Community Reinvestment Act have in creating the housing bubble which lead to our current financial woes. The Federal Reserve hasn't been mentioned as much. The Prudent Bear has a good article explaining how the Fed "helped" by artificially lowering interest rates. (Hat tip to Greg Nyquist.) Ironically the term "coin in the fuse box" comes from an article Alan Greenspan wrote before he was Fed chairman.

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