New film blames financial crisis on spending, Federal Reserve
Why trust the federal government to fix the economy when its own bad policies were to blame in the first place?
That’s what dozens of economist who correctly predicted the financial crisis want to know, according to “The Bubble,” a forthcoming documentary film by historian Tom Woods.
For Woods, the purpose of the film is to educate the public about what caused the 2008 financial crisis, by interviewing several financial experts who saw it coming.
“I want them to walk away saying, ‘wow there is a lot more to this than I thought,’” said Woods, a senior fellow of the Ludwig Von Mises Institute, in an interview with The Daily Caller News Foundation. “It’s not just a comic book story of wicked malefactors of great wealth who manipulated the economy to their own gain and then drove off into the sunset cackling at all of us.”
Woods worries that unrestricted capitalism is being blamed for problems created by government policies, from the regulators who rubber-stamped the housing bubble to the Federal Reserve chairmen who oversaw a reckless expansion of the currency.
“The regulators themselves said the housing market was fine, the fundamentals are sounds, there is no bubble,” he said. “I don’t care if we have a thousand of those or a million of those. If they are all saying the wrong thing, it’s not going to help.”
The film features interviews with Texas Rep. Ron Paul — a former Republican presidential candidate who advocates limiting the powers of the Federal Reserve — and investment banker Peter Schiff. The trailer shows Presidents Clinton, Bush and Obama championing the very policies that caused the crash, in Schiff’s view.
“They couldn’t see this train wreck coming, even though it was staring them in the face,” said Schiff in the trailer. “They’re the ones who are fixing the economy when they don’t understand why it broke. In fact, they broke it, and they’re trying to fix it by doing more of what broke it in the first place.”
The film is planned for a fall release, amid the background of the 2012 election. But for Woods, mismanaging the economy is a bipartisan problem, and neither party is likely to implement better policies. The Democrats rail against the free market and preach more government spending, while Republicans offer only tepid cuts, he said.
“I’m not optimistic about either party’s ticket,” he said. “I think the fact that conservatives are all excited about a budget proposal from Paul Ryan that doesn’t actually balance until 2040 really just shows how desperate they are for anything that seems like it’s going to fix the problem.”
But Woods is optimistic that people who go to see “The Bubble” will leave with a better understanding of how the financial crisis happened, and why the solutions proposed in Washington, D.C — more spending and regulation — will only produce more bubbles.
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