Subprime Reasoning on Housing is a title that says it all for the argument David Beckworth and Ramesh Ponnuru put forward of tight money causing the 2008 Great Recession. Its a macro view that believes a little adjusting of interest rates which were at a historical low of 2% was going to turn around "The Big Short's" well described bubble of fraud saddling the nation's families with mortgages that were impossible to pay off.
As a side note, another case of subprime reasoning is Paul Krugman's "Passive-Aggressive Two Step" blog post regarding Milton Friedman and Anna Schwartz's criticism of the Federal Reserves inaction in The Monetary History of the United States. Monetarist are critical of the Fed for not being the lender of last resort so that banks failed and money contracted with a downward spiral into complete depression during the years 1931-33, well after the 1929 crash and the asset deflation. Krugman's dogmatic perspective to explain the facts unfairly is beneath a scientist and a Nobel Laureate, remember Milton got his long before and for enduring work; not so for Krugman.
No comments:
Post a Comment