Doug"
well first, I would certainly never argue that interest rate policy can "fix" capitalism.
Second, I would dispute that setting the federal funds (internationally, and more accurately, referred to as the interbank lending rate) at zero is an "easy money" policy. I think the relationship between interest rates and the rate of money creation is weak at best. To me, a zero interest rate policy is largely about distribution (ie lowering rentier income and making debt burdens less painful). Still, i certainly agree that there is no interest rate policy that can substantially "fix" capitalism.
-- -Nathan Tankus -----------------------------------------------------------------------------------------------------------------------------------------------