As I write this, the Secretary of the Treasury is on TV telling America that what we need to get out of the mess created by government encouraging banks to make bad loans to homeowners is for banks to make bad loans to small businesses.
The phrase I need to define here is,
March 18th, 2009 at 4:25 pm
VERY nice post! I must say I’m impressed. Most people are too busy vilifying banks to notice that the government is the one pumping monopoly money into the economy at an ever-increasing rate, and that money has to go somewhere (and devalue existing dollars as it does). Granted, the banks did make stupid decisions, but central bank monetary policy promotes misallocation of financial resources (such as making loans to support phenomenon such as the housing bubble, tech stock bubble, etc. that inevitably result in a crash).
I must say, I wasn’t expecting to read something like this when I came to this site, it’s a pleasant surprise to see that people know enough about Austrian economics to understand what’s really going on in the economy (for the curious, “Human Action” by Ludwig Von Mises, or “Man, Economy, and State” by Murray Rothbard).
Now then…