Old Turk

How Central Banks Destabilized the World's Economies

Very insightful article. I agree that the executive branch is the least to blame for the current mess (as long as we exclude Iraq from the definition of "mess"). The worst U.S. president was Wilson, who jammed the creation of the Federal Reserve past the judiciary (and then jammed the U.S. into WWI just as the Europeans were all tiring of the slaughter and were about to seek an armistice, thereby causing a lopsided defeat of the Huns, in turn causing excessive demands for reparations by Germany, in turn causing hyperinflation, followed by the inevitable Hitler). We did not need a Fed, we needed continuation of the gold standard and balanced budgets, and no war. Additional current culprits are Congress, which approved mindless increases in leverage for Fannie and Freddie, the SEC, which lifted constraints on leverage for investment banks around 2003-4, the insanely low fed rates during Greenspan's terminal tenure that caused misallocation of credit and bubbles, and all the greedy mortgage bankers, home appraisers, liars applying for mortgages, investment bank securitization of toxic waste, complete disregard of rational evaluation by all the rating agencies.... Please don't get me started! Bush may not smell like a rose, but in this economic fiasco he is quite far out on the periphery.