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 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