From his 3/19 column on the spreading subprime catastrophe and who is to blame: "Since a lot of nonsense and financially self-interested ideological spin will be written and said in the months and years to come it is important â from the beginning â to be clear about who is at fault for this utter housing and financial disaster. The answer is clear: the blame lies with free market zealot and fanatics and voodoo economics ideologues who captured US economic policy in the last six years in the same way in which a bunch of neo-cons high-jacked US foreign policy to bring âdemocracyâ to the Middle East while instead leading the country into the Iraq and Mid-East quagmire and now disaster. According to these ideologues â listen for example Larry Kudlow extolling every evening on CNBC the virtue of unregulated wild-west cowboy capitalism - government is always utter evil and the economy could never have a financial or economic crisis if taxes are low, government spending is minimal and government intervention and regulation of the economy and of financial systems is inexistent. This nonsense about bubbles, financial crises and recessions being impossible unless the government over-regulates the economy and/or makes monetary policy mistakes is the main religious dogma of this cabal, an axis of ideological zealotry that goes from the WSJ editorial page to a gang of voodoo economic hacks and to some segments of the financial television. The truth is the contrary: unregulated free market capitalism that has no sensible rules, regulation and supervision and sensible countercyclical monetary and fiscal policies of financial markets leads to credit and asset bubbles, financial excesses and economic and financial crashes. Economic and financial booms and busts were much more severe in the US in the 19th when there was no central bank and no welfare state fiscal actor trying to fine tune the economic business cycle. And business cycle swings have become less frequent since Keynesian countercyclical use of monetary and fiscal policy has been introduced from the Great Depression on." http://www.rgemonitor.com/blog/roubini/
Under Central banking the busts are transferred to the currency unit and made less noticeable. But they still happen. The best indicator of value is the US postal stamp. It shows the currency debasement done to us by our wonderful overlords. http://usmarket.seekingalpha.com/article/28360 "Freedom is Slavery" "War is Peace" "Ignorance is Strength" "You must love big brother. It is not enough to obey him." 1984 George Orwell
I would say the exact opposite - that Greenspan's rate cuts and super liquidity promoted the housing bubble which fueled the subprime lending fiasco. Therefore, government intervention is the reason to blame for the current problems.
When there is a correlation, it does not matter if this causes that or that causes this if there is a third variable explaining both. The fed is the third variable. Central planners use any correlation caused by them to explain why they are needed. First they create a mess, then they make people believe they are needed to clean it up.