The PhD-waving geniuses at the Fed have glanced up from their mathematical models and analytical brilliance and (re)discovered an age-old economic phenomenon: Reversion to the mean. Prices for assets tend to return to "normal" patterns after bubbles and busts. Housing prices in "real" (inflation adjusted) dollars since 1890: in 2004, Greenspan said The Fed couldn't [...]
Did you see the Big Three on CNBC last week? Al, Tom and Dave? Like the Tea Party, they spoke the hard truths: get used to the New Normal (unemployment at 8-10%), and America following the road to its date with a Roman Holiday. Greenspan noted that Fed borrowing is crowding out private investment and [...]
Government employees are paid with tax money. When the economy is booming, so are tax revenues. What does government do with extra tax money? Return it to the people? Heavens no! They hire more government employees! When we're in the middle of a financial bubble, we think we can afford all sorts of things we [...]
