I do not and did not blame the Fed for fiscal policy, they set monetary policy. I apologize for not clarifying who ‘the prudent’ are. The prudent include any person, investor, saver or bank that didn’t get caught up in the speculation fueling the bubble. The prudent waited for the day of reckoning which under a free market would have allowed them to reap the benefits of their prudent behavior by snapping up assets at reduced values and allow them to benefit from a higher interest environment.
What ZIRP does is allow banks that gambled by buying deposits to lower their costs, thus rescuing them. This is called “moral hazard”. They’re being rewarded for their imprudent behavior because a bank’s net interest margin (NIM) is the difference between their cost of funds (liability cost) and their asset yield. Banks with strong and stable core deposit bases previously had lower cost of funds than less prudent banks which had to compete for deposit based on enticing customers with higher rates.