The people you should be mad at are the ones that actually created the problem in the first place. These problems wouldn't have existed without the Federal Reserve's low interest rates and politicians like Barney Frank who enabled the GSEs. You should be outraged at the arrogance of those people who think that they can make decisions for the entire country that should be made by millions of informed individuals.
That's like saying don't be mad at the guy holding the gun and pulling the trigger, be mad at the guy that made the gun. I refuse to reduce people to simple automatons responding to incentives created by those in a more powerful position.
The financial system is so convoluted and complicated that it does not matter how many informed individuals are making choices, there are bound to be loopholes. It's taking advantage of these loopholes that screws millions of people in the process that I find unjustifiable.
The point I am trying to make is that the Federal Reserve can never determine the "right" interest rate. It is a decision that has to be made by the individuals on the market, precisely because the financial system is so complicated. Similarly, Barney Frank and George W. Bush shouldn't be able to decide that Americans all need to own their own home. These two factors combined to give us the housing bubble. Too much money combined with a distortion of supply and demand in the housing market.
For more information see this talk on The Morality of Investing and Financial Markets: http://vimeo.com/9182745
Comments
The people you should be mad at are the ones that actually created the problem in the first place. These problems wouldn't have existed without the Federal Reserve's low interest rates and politicians like Barney Frank who enabled the GSEs. You should be outraged at the arrogance of those people who think that they can make decisions for the entire country that should be made by millions of informed individuals.
That's like saying don't be mad at the guy holding the gun and pulling the trigger, be mad at the guy that made the gun. I refuse to reduce people to simple automatons responding to incentives created by those in a more powerful position.
The financial system is so convoluted and complicated that it does not matter how many informed individuals are making choices, there are bound to be loopholes. It's taking advantage of these loopholes that screws millions of people in the process that I find unjustifiable.
The point I am trying to make is that the Federal Reserve can never determine the "right" interest rate. It is a decision that has to be made by the individuals on the market, precisely because the financial system is so complicated. Similarly, Barney Frank and George W. Bush shouldn't be able to decide that Americans all need to own their own home. These two factors combined to give us the housing bubble. Too much money combined with a distortion of supply and demand in the housing market.
For more information see this talk on The Morality of Investing and Financial Markets: http://vimeo.com/9182745