The Legacy Of “Easy Al” And Easy Money (October 15, 2007)
John and Johanna, Juan and Juanita, Ivan and Ivana, their story is archetypical in architecture today. They should have purchased a 1400 square foot starter apartment, but they were induced and seduced into purchasing a 2200 square foot single family two-story home. They could not afford much more than the down payment. They could not afford the subsequent 359 monthly payments. They are being evicted. They will have to live somewhere, someone observes. They need to find a 1400 square foot apartment, but there are few available and many other evictees and evacuees competing for them. And what about the 2200 square foot abode? It sits empty. (See the e-ssay dated April 24, 2006).
“Easy Al” Greenspan never met a problem he would not fix with a fix of easy money. The Fed is charged with addressing monetary policy not fiscal policy. He set fiscal policy without even acknowledging the need for safeguards against the irrationality his monetary policy unleashed. Be suspicious of someone who falls under the spell of one and only one cult commentator; someone should distill the thoughts of 371 (give or take) thinkers in developing a worldview. The Gold Standard crowd almost appears reasonable. At least a gold standard sets a standard for the money supply. Sound monetary policy requires a “goods and services” standard/benchmark. The amount of paper injected into the economy should be measured against the goods and services. Instead, more money than necessary was hurled at problems thereby begetting more problems.
Bumper sticker of the week:
“A cynic is a man who knows the price of everything and the value of nothing.” Oscar Wilde