The Wall Street Journal printed a major story on the aftermath of the financial crisis and the great recession and the lessons supposedly learned. In “Lessons of the Rescue: A Drama in Five Acts” author David Wessell claims, “[f]ive years after the financial crisis, enough time has passed to identify key moments in the war to save the world economy — and to derive lessons from the scramble.” (emphasis added) Wessell also claimed that “[f]ive years after the near-collapse of the global financial system, Americans could justifiably celebrate victory.” Wessel presents some limited criticism from the mainstream of Fed and Treasury mondustrial policy during the fall 2008“crisis,” 2009’s failed fiscal stimulus, and the nearly continuous rounds of quantitative easing during this period of slow recovery. But Wessel overall presents a picture in which, absent those mondustrial policies, things would have been much worse and the major error in the policies was a matter of them being too little too late.
Wessel appears totally oblivious to the fact that absent the Fed as an enabler with its overly expansionary credit creation policy, first in the 1990s, and then in the mid-2000s, neither the dot-com boom-bust with its unfinished recession, nor the housing bubble, general boom and subsequent bust, which precipitated the financial crisis, would have happened. Roger Garrison sums it up succinctly:….To Read More….