When will politicians finally accept that their ideology of cheap money has failed?
A low-interest-rate policy after the dot-com frenzy encouraged the housing bubble. The government-sponsored housing boom led to a banking meltdown. And the fight against the banking crisis resulted in the sovereign-debt mess. Now, because it is forced to invest in toxic debt, the European Central Bank is set to lose its independence. A currency crisis is imminent. Already, former Bundesbank President Axel Weber and the ECB’s chief economist, Juergen Stark, have resigned in protest.