It’s Happened Before, It’ll Happen Again

I wouldn’t say I’m a fan of Bob Murphy, but he certainly hits the nail on the head this time:

Let me say it once again, for the record: Suppose that Ludwig von Mises and Friedrich Hayek were right, and that really low interest rates (caused by the central bank flooding the market with artificial credit) screw up the market’s coordination over time. Then that means we are now sowing the seeds for an even bigger crisis four or five years from now.

It’s true, many people would say, “That’s irrelevant. Right now the pain is so bad, we need to stop the bleeding and deal with future problems down the road.”

However, that’s exactly what people were saying in light of the “unacceptable” pain that would have occurred due to the dot-com crash and 9/11 attacks. It never occurred to people back then, how bad the housing boom would end up being.