MOLI VIEW™

This week's news is full of stories recounting politicians' ideas for fixing an economic situation that is fast beginning to look like a recession. One major disagreement — "the big fight," according to an article in The New York Times — is whether to stimulate the economy by giving money to every citizen or only those who earned enough to pay taxes.

This is hardly the big fight we should be having — especially in an election year. None of the candidates have really addressed the causes of the subprime mortgage meltdown, except in the most general of terms. Some of them will bring up the fact that sovereign wealth funds seem to be buying up American assets at a frightening pace. But that's a symptom of our problem, caused by the declining dollar and our need to borrow from abroad, rather than its cause.

The current credit crisis was sparked by the subprime mortgage boom. As lenders pushed exotic mortgages on people who couldn't afford them, banks turned those loans into investment vehicles without labeling how risky some of them were. The Federal Reserve, charged with regulating such lending, stood by in the name of allowing more people to become homeowners. Greenspan, an Ayn Rand acolyte, has always believed that markets regulate themselves. According to another Times article — titled "Fed Shrugged as Subprime Crisis Spread," in what must be a copy-editor's wink at Greenspan's intellectual roots — the Fed chairman wouldn't even publicly urge caution.

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