I don’t think it’s politically feasible. Few Americans would accept any situation where it became very difficult for many Americans to get credit. And the preferences and behaviors of consumer credit outfits make me extremely distrustful that the market would do a good job of anything beyond separating more consumers from more of their money.

My gut says that if the market alone determined rates and regulation was low, we’d veer towards usury.

You are half way there with your interest rate pondering. We would have complained about an interest rate hike, certainly, but maybe interest rates should be market determined. Does the Fed have enough visibility into the market to do a good job setting rates? Isn’t that were bubbles (relating to capital) are being formed – poorly priced capital? A position held by a vocal minority of Americans has been that the Fed role in setting monetary policy should be reconsidered.

When things started to get worse in other places, I starting seeing people write things phrases like “an overabundance of capital seeking out high returns.”

This leads me, total economic layman, to think that the very roots of the current state of affairs is closely related to interest rates being too low for too long. Too much capital too easily available. So I agree with you about that. The point where I step back is where it comes to assigning blame.

To my knowledge, virtually no one of prominence was advocating for higher interest rates to protect the economy. Even if Greenspan had by miracle been so prescient as to insist on slowly backing away from such low interest rates, and begun ticking them up, how long would he have survived. Surely those with any passing familiarity with American politicians knows that he would have soon found himself friendless and without political support.

Just for sh!ts and giggles, I’ll toss out a weirdo hypothesis that I recall from Robert Pirsig’s 2nd book, Lila. I’ll substantially butcher it, but here goes. Pirsig says that sociopolitical systems come to have a life and imperatives of their own. They begin to operate well beyond human control, sort of like if humans were the hardware and interacting governments, businesses, and institutions were the software.

Reboot time. No?