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01-14-2008, 09:03 PM #1
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Anna Schwartz: Fed to Blame for Subprime Crisis
Anna Schwartz: Fed to Blame for Subprime Crisis
Monday, Jan. 14, 2008 5:14 p.m. EST
Noted economist and author Anna Schwartz blames the Federal Reserve for the credit bubble and subprime mortgage crisis the U.S. finds itself in.
She’s even gone as far as to say, "The new group at the Fed is not equal to the problem that faces it.â€Join our efforts to Secure America's Borders and End Illegal Immigration by Joining ALIPAC's E-Mail Alerts network (CLICK HERE)
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01-14-2008, 09:41 PM #2
Yes, I cannot help but question whether interest rates would have had to go as low as they have gone to keep the US economy healthy. We need to keep US businesses going, and keep American workers working, but job growth, for one, is an unreliable indicator. Too much job growth in the paper-pusher sector---a problematic trend in these days of nearly universal higher education.--leads to an unbalanced economy. Businesses can no longer find the operative persons--and hence look elsewhere, such as bringing them across the border. This does give the college grads (service sector) some career opportunities, but necessitates expanding businesses and an expanding labor force. Could we not have kept the interest rates just a little higher---low enough to ensure employment, but not so low as to create a stampede? If you are used to borrowing money at 9 percent, to go to 7 is a godsend--to go to 6 courts disaster.
So now, property flippers who got out early enough have done well, along with the national homebuilding companies and the realtors who can move from boom to boom. And I believe it is good to encourage homeownership. Helping people turn their homes into "ATM cash machines" via equity borrowing is fine---but only if the equity doesn't suddenly vanish. The Fed just happened to open the gate wide enough for too many eople to jump through it."Men of low degree are vanity, Men of high degree are a lie. " David
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