Déjà Vu at the Federal Reserve

The Fed is meeting today and will determine whether or not it will lower the federal funds rate.

Many expect that the cut could be 50 basis points, taking the federal funds rate back down 1 percent. Ironically, it was just last week that Greenspan was in the hot seat, testifying before the House Oversight Committee regarding his monetary policy earlier this decade — including lowering and holding rates at 1 percent.

Even though the economic environment is radically different today, let’s hope that policymakers, presidential candidates, members of Congress and other officials have a much better understanding of the ramifications of such a move. Having rates so low will not give any administration much wiggle room should the economy still need to be jump-started in the months to come.

But the more terrifying reality is that the same people who created policies and regulations (or the lack thereof) that led to the current financial meltdown are still at the helm, crafting new policies, creating bailout packages and forging rescue plans. While Greenspan took the heat he deserved, he is the first person to come forward and take responsibility for his actions and take ownership for contributing to the asset bubble we are now de-leveraging.

Where is everyone else? Certainly no one believes that one man was/is solely responsible and put in motion the policies that created the global financial debacle we are suffering through today. It is rather frightening to think that the myriads of other unnamed souls in Congress and the administration who helped to create this mess have hidden in the shadows or pointed fingers and are now responsible for cleaning up the very mess they created.


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