The Federal Reserve is an independent agency. And that means basically that there is no other agency of government which can overrule actions that we… - Alan Greenspan

We had a bubble in housing.

The United States is also losing the rugged pioneering spirit that once defined it. In 1850, Herman Melville boasted that “we are the pioneers of the world, the advance-guard, sent on through the wilderness of untried things, to break a new path in the New World.”7 Today many of the descendants of these pioneers are too terrified of tripping up to set foot on any new path. The problem starts with school. In 2013, a school district in Maryland banned, among other things, pushing children on swings, bringing homemade food into school, and distributing birthday invitations on school grounds.8 It continues in college, where professors have provided their charges with “safe spaces” and “trigger warnings.” It extends to every aspect of daily life. McDonald’s prints warning signs on its cups of coffee pointing out that “this liquid may be hot.” Winston Churchill once said to his fellow countrymen, “We have not journeyed across the centuries, across the oceans, across the mountains, across the prairies, because we are made of sugar candy.”9 Today, thanks to a malign combination of litigation, regulation, and pedagogical fashion, sugar-candy people are everywhere.

I came to a stark realization: chronic surpluses could be almost as destabilizing as chronic deficits.