So what has happened to us is not a failure of the free market but instead the inevitable working out of the consequences of intervention by government into the free market. So in other words, the problem with Alan Greenspan wasn't that he believed in the free market too much, it's that he didn't believe in it enough. He believed that he could be the monetary central planner, planning money and interest rates. The New York Times called him "the infallible maestro of our financial system." This is just goofy. Why doesn't Alan plan steel and concrete production for us while he is ...

So what has happened to us is not a failure of the free market but instead the inevitable working out of the consequences of intervention by government into the free market. So in other words, the problem with Alan Greenspan wasn't that he believed in the free market too much, it's that he didn't believe in it enough. He believed that he could be the monetary central planner, planning money and interest rates. The New York Times called him "the infallible maestro of our financial system." This is just goofy. Why doesn't Alan plan steel and concrete production for us while he is at it?


In addition to the usual government policies we've all heard about - like the very existence of Fannie Mae and Freddie Mac -- I have a whole chapter on the housing situation and I identify half a dozen culprits. But, again, the key is the Fed.

Let's say there had been no Fed but that people had just started buying a lot of houses at random. What would have happened is the banks would have run out of money to lend and so interest rates would have shot up and that would have discouraged the bubble process from continuing; it would have discouraged people with no job from buying five investment properties, for example. It would have stopped it.

But instead, because we have a monetary central planner in our economy, we can create a lot of additional money out of thin air, so the banks feel like, "Oh, wait. Our resources are not depleted after all. We can keep on lending." But if it hadn't been for the Fed, the housing bubble . . . could not have begun in the first place.

Young people are interested in Austrian economics like you wouldn't believe. [a]t our Von Mises Institute we are seeing more students than ever applying for our program and they want to become professional economists. They view the Austrian school as the wave of the future. It makes sense.