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Tuesday, September 24, 2013

'The Absolute Funniest Thing I Have Read This Year'

For a moment, Menzie Chinn thinks he's reading The Onion. Then he realizes it's actually Fox "News":

The Absolute Funniest Thing I Have Read This Year: From Ed (We Are Not in a Recession) Lazear and Keith Hennessey, "Bush ended financial crisis before Obama took office -- three important truths about 2008", FoxNews (9/16)...
[T]he article ... resurrects the "Blame it on Beijing" view of the origins of the crisis. As if all that capital flowing into America came out of nowhere -- that housing boom, deregulation of financial markets, etc. had nothing to do with actual deregulatory actions pushed by the Administration. More on the "Blame it on Beijing" thesis here and here. (Heck, I got seemingly infinite numbers of offers for credit cards in 2007, but I didn't take 'em all, borrow to the max, and then default.) ...
I agree that the measures undertaken in the immediate aftermath of Lehman were extremely important, including the conservatorship of the GSEs, and implementation of TARP. See the discussion by Phill Swagel of crisis management during the height of crisis.
But, Lazear and Hennessey blur the distinction between Fed actions and those of the Administration. To say the Bush Administration ended the crisis overstates the case (to say the least).
Finally, the entire article reminds me of the person who builds a house in the middle of a big area of dry grass, lobbies against putting any regulations that might require tile rooftop, goes on and puts on a wood shingle rooftop, fails to clear away the dry brush surrounding the house, and then -- when the house catches on fire -- claims victory when one room is saved because a lawn hose was trained on that part of the house. ....

    Posted by on Tuesday, September 24, 2013 at 04:05 PM in Economics | Permalink  Comments (22)


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