It Is All Intentional
I've harped for years that our leaders don't make it to the top by screwing up all of the time. If we think they are making mistakes, it's because we make erroneous conclusions about their goals.
This whole boom and bust bubble cycle was engineered. Most of the folks that conspired to destroy our economy are still screwing it up. And they have only one tool left in their toolbox, that is blowing bubbles. The US Government is the only entity left that can blow a bigger bubble than the ones we've seen so far. And when it pops, it's gonna really suck to be us.
h/t Karl Denniger
The basic point is that the recession of 2001 wasn't a typical postwar slump, brought on when an inflation-fighting Fed raises interest rates and easily ended by a snapback in housing and consumer spending when the Fed brings rates back down again. This was a prewar-style recession, a morning after brought on by irrational exuberance. To fight this recession the Fed needs more than a snapback; it needs soaring household spending to offset moribund business investment. And to do that, as Paul McCulley of Pimco put it, Alan Greenspan needs to create a housing bubble to replace the Nasdaq bubble.
Judging by Mr. Greenspan's remarkably cheerful recent testimony, he still thinks he can pull that off. But the Fed chairman's crystal ball has been cloudy lately; remember how he urged Congress to cut taxes to head off the risk of excessive budget surpluses? And a sober look at recent data is not encouraging.