Friday, April 22, 2011

One True Sentence

From Kevin Drum:
The Great Collapse was a big enough, and unexpected enough, event that it should have changed your mind at least a little bit about something.
So what has it done to my mind?

  • Less credibility for big shot managers.  When you read about Lehman Brothers going under, or Citigroup's troubles, their books were so screwed up they didn't know where they were. Outsiders checking their books would find a few billion more losses every day or so. 
  • Alan Greenspan loses most of his reputation.
  • Less credibility for economists, particularly Bush's.
  • Diminished reputation for Barney Frank and other Dems who ignored warning signals. I'm not convinced by the right wing thesis that pushing home ownership was the original sin which caused the collapse, but the push to get low income people into home ownership created an atmosphere in which the con men who made liar's loans could flourish.
That's a few lessons; there may be more.

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