The Fed under Ben Shalom Bernanke has taken unprecedented steps to forestall an economic collapse.
In 1929, the Fed (Fairly new to the game at that time) did not do enough to help the economy. There were no written rules back then, and the Fed did not know how much authority it could assume. You might say it had an introverted personality and was reluctant to draw too much attention to itself. (After all, what would people think? Oh my gosh, how embarrassing!)
Now, with the mortgage crisis creating economic difficulty all over the globe, the Fed has stepped in aggressively and is doing an absolutely masterful job. The mortgage lending that started this whole mess came about under Greenspan. If the Fed can act as aggressively now with warnings and direct money infusion, how come Greenspan did not warn about the variable interest rate loans that were being foisted on the ignorant public? Was Greenspan a shill for the lending industry?
Millions of minorities were sold these loans and they did not have the financial savvy to see the serious problems they presented if the interest rates went up. The same thing applied to the auto loan industry where the item was not to make a safe and prudent loan, but to find a way to finance it so that the car could be sold. Over ninety percent of repossessions are from poor minority families who were assured that they could afford the loan.
Nearly half of the home foreclosures are for homes being bought by minorities.
I distinctly remember Alan Greenspan endorsing low variable interest rate loans several years ago. What was wrong with that man? He surly knew what would happen once he started ramping up the overnight interest rate and interest rates overall increased.
Ben Shalom Bernanke is proving himself to be a darn good man to run the Fed. He should have replaced Greenspan years earlier.