The Great Recession of 2008 - 2009

Prof. Steve Horwitz puts the current recession into historical perspective and explores the different approaches to recovery. Taped at Evenings at FEE on July 18, 2009 in Irvington, NY.

A few highlights:

* To say that greed caused the housing bubble is like saying that gravity causes plane crashes.

* Interest rates are not the price of money. They are the price of time.

* Printing more money to get out of a recession is like drinking more to avoid a hangover.

* Why did so many financial institutions loan money to people who could not pay it back? FNMA and Freddie had a Congressional requiring that 52% of their financing would be with borrowers with income below the median household income.

* Everybody wants more affordable housing, until they discover what that really means.

* The three major rating services operate as a government-maintained cartel. They don't have any competition, therefore they don't learn.

* Alan Greenspan encouraged financially risky behavior by lowering interest rates when markets misbehaved.

* The recession is the recovery.

* The Obama administration sees every problem in terms of health care, the environment, and education.

Watch the whole presentation here.