Wiley: Thanks for making the point that the Fed is not a government agency, nor are they following any governmental policies as regards monetary or credit policy. Neither Freddie nor Fannie are governmental agencies either, rather they are GSEs, but most people feel that the “full faith and credit” of the US Government are behind them.
Greenspan had a long run at his post, punctuated by some truly bad monetary policy decisions. It may be an arguable point to some, but looking at the events of 1997, 2000 and now, you can make the point that the air in those respective bubbles was pumped in by the Fed.
Bernanke now has the unenviable task of trying to simultaneously hold the line and avert disaster. He is not an idiot; to the contrary, he is a very bright individual. But, as was opined on this thread several times, he is doing his level best to keep parroting the script he has been given and, in so doing, comes across as something of an automaton.
If anyone were to sit down and really give the American people a primer on what this bubble is made of and the disastrous and reckless choices we have made from a monetary and credit vantage to prop up the illusion of a dynamic and growing economy, you would probably have a riot. On second thought, no, you wouldn’t. People really don’t care so long as they can keep the plastic hot and buy the newest Hummer, or RV, or boat or go to Paris for summer vacation.
