Curing the Economy in One Easy Step

Monday, May 29, 2006
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That’s it. Solution given. Now just do it.

The Fed must balance rising inflation, high commodity prices and a strong job market on one hand against a declining housing market and scattered signs of slower business growth on the other.

And the loyal followers out there will read this, nod their heads in agreement, and think “yea.” The notion that a series of governement prescriptions can cure the ills government gave us is stupefying.

I made a comment to a friend, the other day, about the Fed and its effects on booms, busts, and bubbles, and I specifically talked about the housing bubble, fueled by insanely-crafted mortgages – ARMs and interest-only – and he replied with the words I hate to hear most: “irresponsible lending” (on the part of private banks). To this day he has not shown me one example of a homebuyer that was forced, at gunpoint, to buy a home that was beyond his means, on a farcical lending program. The irresponsibility starts with the Fed; the lending institutions are enabled by the Fed; and the idiots that get sucked into the schemes do it out of pure idiocy and the must-have mentality.

I’ve sat here in the same modest home for 14 years. They have no one to blame but themselves, for popping the poison pill that baited them.

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