Blame Government, Not Greed – and, Please, Ignore Central Banking

Friday, October 14, 2011 – by Staff Report

There is no mystery where the Occupy Wall Street movement came from: It is an offspring of the same false narrative about the causes of the financial crisis that exculpated the government and brought us the Dodd-Frank Act. According to this story, the financial crisis and ensuing deep recession was caused by a reckless private sector driven by greed and insufficiently regulated. It is no wonder that people who hear this tale repeated endlessly in the media turn on Wall Street to express their frustration with the current conditions in the economy. Their anger should be directed at those who developed and supported the federal government’s housing policies that were responsible for the financial crisis. – Wall Street Journal

Dominant Social Theme: Look here, look here … It’s government policies, see! Don’t look THERE. Don’t look at central banking. Look away from there. Look here … at government.

Free-Market Analysis: Peter Wallison, a senior fellow at the American Enterprise Institute and member of the Financial Crisis Inquiry Commission has had a high profile of late, publishing several articles in the Wall Street Journal (see excerpt above) blaming government rather than the private sector for the 2008 meltdown.

When the Financial Crisis Inquiry Commission (FCIC), he tells us, reported in January that the 2008 crisis was caused by “lax regulation, greed on Wall Street and faulty risk management at banks and other financial firms, few were surprised.”

Wallison differs. The crisis wasn’t the fault of the private sector, he writes. It was the fault of the government. Unfortunately, when Wallison states it was the government’s fault, he has a fairly specific idea about “government.” His government analysis seems to leave out the leading cause of the disaster – central banking policies.

It is central banking’s money creation and low interest rates that created the fuel for this last catastrophic bust that has – evidently and obviously – virtually ended the dollar reserve system. But that’s not Wallison’s emphasis.

Click below to read the entire article:

via The Daily Bell – Blame Government, Not Greed – and, Please, Ignore Central Banking.

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