Quote:
Originally Posted by Orruar
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I'm pretty sure libertarian monetary policy would have been to abolish the Fed's interest rate target and instead letting the rate float freely to its market value. He purposefully set the interest rate well below the known market value to goose the economy. I'm not sure how you claim such a move is the implementation of libertarian monetary policy, but I'm intrigued as to how you'll square that, so go for it.
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Because his ideology wasn't purely libertarian, but had an objectivist slant. It was intended to stimulate economic activity, just like you said. (With a trickle-down motive)
But what really fucked things up wasn't so much his interest rates, but the actions on behalf of Greenspan and his cronies that served to
reduce the amount of rules and regulations financial institutions were subjected to, under the impression that financial institutions operating in as close to a free market environment as possible would be more prosperous. This is what I mean when I say 'his libertarian policies'.
And as we've discussed before, although this was termed 'deregulation', it actually produced an increase in regulatory volume because these laws, which essentially gave financial institutions increased freedom to act how they wanted, manifested legislatively as laws and rules. In essence, a large volume of new federal rules and regulations decreased the extent to which the government regulated and oversaw the behaviors of financial institutions. The net effect being the deregulation of the financial sector.