It Was Only A Mortgage Crisis...

Bill Anderson is absolutely correct when he writes:

Remember this: the crisis not long ago was pretty much confined to the housing sector. The fact that these horrible mortgage-backed securities were held by a lot of Wall Street firms did not mean that the entire Street was about to collapse.

Yet, look at how the government has responded. It has jacked up debt by a cool trillion, inflated like mad, and now the disease has spread. The government has taken what would have been a sharp downturn and now turned it into a calamity.

And the government's solution? Make the calamity an out-and-out depression.

Our only point of departure from Anderson's observation, and it is an important departure, is with regard to his comment on inflation. What moved the crisis from a mortgage crisis to a full-fledged across the board financial crisis was the Fed's seeming bizarre halt to money supply creation approximately four months ago.

If you are an Austrian economist running the Fed, and halt money printing to completely end Federal Reserve money manipulation, then I say let's get you some bodyguards and let's roll, but if you are Bernanke, who has no allegiance to sound money or ending money manipulation, and you bring about a four month near halt in money(m2) printing, in real world economik you are clueless or evil, since you will start printing again, as it appears you are now doing, but in the meantime the money slowdown has created all sorts of opportunities to allow the government to institute controls over more and more sectors of the economy.