But to blame Greenspan for this mess for lowering interest rates is rediculous. We had an economic crisis, so lowering short term rates to stimulate borrowing is hardly artificial. And long term rates were already low. OK, so we got lots of big houses- so homelessness can be eliminated, we have the ability to produce more with our homes than before (home offices, storage, entertainment), wealth was spread to construction workers- and the problem is??? OK, the dollar devalued 35%, so we started to turn the tide on our trade deficit as a % of GDP and work to pay off our debt while financing a war against terror (if you’re opposed to that, OK, your view, but you can’t argue that we spent lots of money on it) and the problem is??? We had an economy that was growing so fast Bush’s opponents had to resort to worrying about sustainability and sprawl and “global warming” (now “climate change”, soon “hoax”) .

The negative effects you speak of arose from RAISING rates- ABOVE long term market rates. THAT”s artificial!

You’re right, we can allow bankruptcy to work its “magic”. We can reward the biggest losers/most leveraged/least productive by letting skip away debt free. We can allow the Chinese to use their trillions to buy assets for pennies on the dollar. And we can destroy the confidence in building during an economic boom, only to see it taken away by the government’s meddling in the business cycle and economy.

But allowing a little of every debtholder’s wealth be “stolen” via inflation seems much better than allowing perhaps more to be “stolen” via defaults and taxation. I can’t understand why so few people understand the difference between fiscal and monetary stimulus, when it’s killing our economy. And there’s no “magic law” that says it has to come back.

Remember from history that the unemployment rate during the Depression peaked in the 25% area, with few safety nets in place until FDR took the courageous lead to fulfill one of any government’s principal functions: to maintain “domestic tranquillity.”

Adlof Hitler had the same function as FDR. It is obvious that the two men took different aproaches to finding a solution to the same problem.

It is primarily due to the largesse of the U.S. and its Marshall Plan and the existence of the historic spirit of the German people, despite their devastating defeats, to place the country back at the forefront of Europe in record time.

Are Americans any less able to gird themselves during a major crisis and return to the spirit of self-reliance with government’s help that propelled the nation forward for two centuries?

Throughout its history, the U.S. has always relied on government to fund its enterprises, whether in furthering the expansion of the railroads coast to coast, the acquisition or outright domination of new lands, or the expansion in space. Were those achievements funded solely by private interests? No.

Were the Louisiana Purchase or Seward’s Folly achieved by the “free market?” No.

Did the major successes in technology during this last half-century come about solely through private initiative? No.

Few, if any, Americans would really opt to live in the unregulated , often chaotic times, socially diviided times they so comfortably choose to recall while sitting in their safe armchairs.

Business cycles created discomfiture in the United States during the century well before the founding of the Federal Reserve. They will do so again during this century.

It seems that it is human nature to try to assign blame to something or someone whenever a crisis occurs.

The real blame lies within the fallability of human beings themselves, on occasional errors of judgment or execution, of ignorance or unwillingness to accept realistic, proven facts, of preferring to live in the vague coziness of wishful theory.

There can be no doubt that the world is changing, that it is “Hot, Flat and Crowded” as Thomas Friedman suggests in his recent book.

The question is not whether to assign blame nor to return to some wishful prior time.

The question – for Americans and the world – is how to solve the exisiting crises of finance, environment and inceasing populations and to forge ahead with the indominable spirit of an enterprising people.

What are you talking about.

In early 2001 Alan Greenspan artificially lowered the price of money from 6.5% down to 1.75% in one year.

A promise of growing opportunity limited only by competition and performance?

The promise of opportunity flowed into the housing market causing prices to reach nosebleed heights.

Nascent business, complex technology systems and rebuilt slums?

We got bank failures, bank bail outs, foreclosures
TARP 1 & 2, stimulus packages etc etc

In a world where significant long term investment is required in complex technology systems, rebuilt slums, alternative energy, and long term agra and pharma validations that have long payback periods, do we really want the potential investors to have the Fed-created business cycle in the back of their mind, ready to snatch their nascent business as being “overleveraged” next time the scarcity paradigm crowd decides to crow about overheating? No- they should be able to rely on the promise of growing opportunity limited only by competition and performance- and not government meddling and artificially elevated interest rates!