11 May 2010

Artificially Low Interest Rates Are Bad for the Economy

Shameless Self-Promotion 1 Comment

I don’t know if the Detroit News in general has a “conservative” editorial position, but the opinions editor apparently is a fan of Austrian economics. He ran my piece:

The Federal Reserve and its supporters claim that the unprecedented interventions rescued the financial markets and the housing sector. Also, they point to the moderate consumer price inflation for the past year as evidence that the Fed isn’t “overheating” the economy.

Yet these are exactly the same excuses from the Greenspan era.

It is now obvious that housing prices during the mid-2000s were completely divorced from reality and that the U.S. economy was in an unsustainable dreamland. Five years from now, Americans may look back and think the same was true of 2010.

Printing money to keep zero percent interest rates has never worked long term, will only postpone the inevitable correction, and indeed make another crash more likely.

One Response to “Artificially Low Interest Rates Are Bad for the Economy”

  1. Bob Roddis says:
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    It’s still fairly “conservative”. In the1980s, they had Warren Brookes on the editorial board.

    http://fumento.com/warren.html

    I still have a global warming skeptic editorial from 1990 that I cut out and saved.