Ron Paul: So my question is, are you familiar with the explanation of the Austrian economists, of the business cycle, how bubbles are formed and what we should do, and you shake your head yes, and if so, if you do understand that, which part of it don’t you like? And why don’t we look more carefully at those economists? They were right 10 years ago, I believe they’re right now. Why aren’t they consulted?
Treasury Secretary Geithner: Congressman, I agree with much of what you said and as you and I have talked before in this hearing, I think you’re right to point out that a long period of low real interest rates around the world played a major role in contributing to this financial crisis, this real estate boom, this credit boom. You’re also right that moral hazard played a very important role, most dangerously in Fannie and Freddie and those institutions were allowed to grow to enormous size, take on enormous risk without capital to support those commitments because of the expectation the government would come in and protect them from the failures. I completely agree with you. Completely agree with you.
(ht Evan Mazur)
I completely agree with you, but I'm going to continue aiding and abetting this fraud because it butters my bread.
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