THE FED CAUSED THE CRISIS:
Posted by PrestoPundit on 10/19/2008
Hayekian wisdom from the magnificent Anna Schwartz:
“If you investigate individually the manias that the market has so dubbed over the years, in every case, it was expansive monetary policy that generated the boom in an asset. The particular asset varied from one boom to another. But the basic underlying propagator was too-easy monetary policy and too-low interest rates that induced ordinary people to say, well, it’s so cheap to acquire whatever is the object of desire in an asset boom, and go ahead and acquire that object. And then of course if monetary policy tightens, the boom collapses.”
Be sure to read the whole thing.
BONUS: Video of Hayekian economist Peter Boettke on the current crisis.