via Monetarism, Abenomics, QE, and Minimum Wage Proposals: One Bad Idea Leads to Another, and Another – Mike Shedlock.
Monetarists act on the theory falling prices are a bad idea
The Fed prints money and holds rates too low
Housing bubble builds
Medical and education prices soar
Student loans soar to “help” the students
Because housing is not affordable numerous affordable housing programs appear causing still more unwarranted housing demand. Few see the bubble because housing is not in the CPI
The affordable housing advocates are abhorred by falling prices
Fed bails out banks and steps in to support housing prices
Income inequality soars
Students remain stuck with debt
Because of one idiotic notion, that “falling prices are a bad thing”, the Fed has generally managed to keep the CPI rising, with some things going up much faster than others.
In response to uneven price inflation, we have seen numerous “affordable housing” programs, massive student aid programs, bank bailouts at taxpayer expense, Obamacare to make medical insurance affordable, cash for clunkers, Abenomics in Japan, and countless other economic idiocies.
People propose bad idea after bad idea simply to fix problems caused by the previous bad idea. This is corollary six to the Law of Bad Ideas.
Law of Bad Ideas Corollary Six: Bad ideas lead to more bad ideas to fix problems caused by previous bad ideas.