This WSJ article is right on the mark!
Reckless government policies, not private greed, brought about the housing bubble and resulting financial crisis.
I am very familiar with some of these arguments, but I haven't seen the overall point this well organized.
Also like this point about the greed narrative:
The narrative that came out of these events—largely propagated by government officials and accepted by a credulous media—was that the private sector's greed and risk-taking caused the financial crisis and the government's policies were not responsible. This narrative stimulated the punitive Dodd-Frank Act—fittingly named after Congress's two key supporters of the government's destructive housing policies. It also gave us the occupiers of Wall Street.
Although I don't entirely agree with link to the Wall Street movement. They definitely have it wrong, blaming capitalism etc... but they aren't happy with too big to fail, monetary policy etc... either. So partial credit for them, in my books.
All the people making policies that steer the financial industry are former or future industry insiders. Blame isn't mutually exclusive when the corporations are in bed with the regulatory bodies.
ReplyDeleteJohnson: Partially true, IMO.
ReplyDeleteThe most destructive policies were those that created the housing bubble. These policies were actually pushed by ACORN, and other social-activist lobbies. In this respect, they were completely well intentioned. Well intentioned government policy often produces bad results that were not foreseen by the designers.
The clear example of corporate-government cronyism is "too big to fail".