December 12, 2011 - 10:30am
Federal Reserve Headquarters
When the Paul family, Ron Paul and son Rand Paul, blame the Federal Reserve and its cheap money policy during the Bush years for creating the housing bubble and the resulting financial collapse, they are only telling a fraction of truth. The bigger problem was the loophole Phil Gramm wrote into the 2000 Federal Budget that made it possible for banks to lend at ratios that were guaranteed to end in disaster.
The father and son Paul duo, Ron and Rand, have been pointing to the Federal Reserve's low interest rates, primarily under the Bush administration, as the primary factor in creating the housing bubble. If we do some root cause analysis on this, we find that the Fed's low interest rates were...