Wednesday, March 25, 2009

This Recession is a Result of Rationality

1) Rational elected officials push for policies that appeal to voters.

2) These government interventions (Fed reducing interest rates, government sponsored enterprises, etc) made debt cheap, causing rational people to take on too much of it (especially houses).

3) Rational government officials feel pressure to "do something" (Bailout, Stimulus, AIG bonus taxation).

4) This scares rational buyers and investors who sit on the sidelines waiting to see how the rules change.

5) Rational blogger decides to explain where the irrationality exists on his next post to peak reader interest.

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