"The problem with socialism is you eventually run out of other people's money" - Margaret Thatcher
"The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design" - F.A. Hayek
Wednesday, January 14, 2009
Randy Parker Hall of Fame: Robert Lucas
This little gem from Nobel Prize winner Bob Lucas was published December 23 and slipped under the radar. This is really a great piece.
What does the good Doc think about the claim that monetary excess(from low Fed Funds rates and drastic increases in the MS from 2001 - 2005 which was mostly during the Greenspan era) helped create the financial crises we are currently experiencing by further inflating the housing bubble. Or were such actions needed, just, and required during these times?
Armie: How could it be viewed otherwise? But most importantly, it was the new financial innovation that was supposed to reduce systemic risk that indeed did the exact opposite. Moreover, you can't have a bubble without a bunch, and I mean a bunch, of jackasses thinking housing prices would do nothing but increase forever.
Hey, you forgot to put blame on a particular friend of ours who presides over Massachusetts's 4th congressional district along with the institutions he supports.
Franklin: Of course! How could I forget? If you will notice the archives of my blogs, you will see I have one special just for Barney. Indeed he and the creatures of Congress that took away any moral hazard from the market deserve most of the blame. Take away the negative consequences of people's actions and you fill the world with fools.
What does the good Doc think about the claim that monetary excess(from low Fed Funds rates and drastic increases in the MS from 2001 - 2005 which was mostly during the Greenspan era) helped create the financial crises we are currently experiencing by further inflating the housing bubble. Or were such actions needed, just, and required during these times?
ReplyDeleteArmie: How could it be viewed otherwise? But most importantly, it was the new financial innovation that was supposed to reduce systemic risk that indeed did the exact opposite. Moreover, you can't have a bubble without a bunch, and I mean a bunch, of jackasses thinking housing prices would do nothing but increase forever.
ReplyDeleteHey, you forgot to put blame on a particular friend of ours who presides over Massachusetts's 4th congressional district along with the institutions he supports.
ReplyDeleteFranklin: Of course! How could I forget? If you will notice the archives of my blogs, you will see I have one special just for Barney. Indeed he and the creatures of Congress that took away any moral hazard from the market deserve most of the blame. Take away the negative consequences of people's actions and you fill the world with fools.
ReplyDeleteFranklin: I got a special blog archive coming just for you too.
ReplyDeleteUH-OH!, Be easy on me Doc!
ReplyDelete