Posted on 05/31/2009 11:41:16 PM PDT by libh8er
...There’s plenty of blame to go around these days. But the prime villains behind the mess we’re in were Reagan and his circle of advisers — men who forgot the lessons of America’s last great financial crisis, and condemned the rest of us to repeat it...
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...But there was also a longer-term effect. Reagan-era legislative changes essentially ended New Deal restrictions on mortgage lending — restrictions that, in particular, limited the ability of families to buy homes without putting a significant amount of money down.
These restrictions were put in place in the 1930s by political leaders who had just experienced a terrible financial crisis, and were trying to prevent another. But by 1980 the memory of the Depression had faded. Government, declared Reagan, is the problem, not the solution; the magic of the marketplace must be set free. And so the precautionary rules were scrapped.
Together with looser lending standards for other kinds of consumer credit, this led to a radical change in American behavior...
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(Excerpt) Read more at nytimes.com ...
Krugman is annoying and wrong. Isn’t he the one who suggested that the Administration come up with a number for the stimulus package and then add 50% to it?
Summary:
I am stupid and can’t think for myself.
Reagan made me do it.
They always blame everybody but themselves.
“But there was also a longer-term effect. Reagan-era legislative changes essentially ended New Deal restrictions on mortgage lending — restrictions that, in particular, limited the ability of families to buy homes without putting a significant amount of money down”
Shame on him. He was there & he knows he is WRONG—those restrictions were eased under Clinton in the 90s & Clinton took public credit for it! A Home for everyone and a chicken in every pot. That credo is not Reaganomics!
Ping
What crisis? Banks are stabilized. the economy is recovering. the market will hit 9000 this week. the only “crisis” is the one in our future—the one caused directly by Barack Obama and Ben Bernanke. the one which mixes insane government spending with even more insane purchases of our own debt with more debt. When the music stops, who will have a chair?
There was never a tax increase that Krugman didnt masterbate on. So his basis was that during the Reagan era, spending policies were unconventional which led to this so-called “mess”. How nice. I guess you cant blame a sitting Dem president who’s entire policy is based solely on Karl Marx.
I’ll wait for the ones on our side much much smarter than me to embarrass this guy’s argument and deranged way of thinking.
What a nitwit this guy is.
Now, if Reagan lifted one small restriction, that made it easier for families to purchase homes without a huge down payment...than what does Krugman say about the entire Clinton administration?
Not only did they threaten banks with penalties for not complying with the CRA, but they dropped the existing standards of Fannie & Freddie to insure those loans with tax dollars!!??!!! And for good measure, they were the proud authors not only of eliminating Glass-Steagall but also were the ones who gave birth to the Collateralization thing, passed in the final weeks of 2000. While Bush was still in Texas waiting for results of the recount! WTF. Doesn’t Krugman read his own paper? Clinton talked about this in an interview with the NYT just a few days ago.
This is why, during the fall election, in an interview with ABC’s Chris Cuomo, when Clinton was asked if Bush was at fault for this housing thing he said: “No. President Bush is not responsible for this.” (or something to that effect) And it’s on tape. Oh, you never saw that tape?
Prolly because ABC buried it. I prolly have it someplace in my email.
Paul Krugman is a brain dead liberal zombie, and the only "economist" I've ever heard of who hates free markets (outside of Marx).
Poor man. He must have early onset Alzheimer’s.
I can’t believe they would try to sell this.
Krugman is the raging idiot who advocated introducing a tax to ensure gas never fell below four bucks a gallon.
Reagan didn’t invent the CRA, Carter did. Reagan didn’t put the CRA on steroids and use the Justice Department to shove it down the throats of banks, Clinton did.
If the New Deal was settled, why did FDR run and win a third term which was a month before Pearl Harbor. Normally Presidents are not allowed to have more than two terms in office, yet FDR ran again for a third term when we were not at war yet. I like FDR, but he was the closest person to a dictator we ever had.
Which means that I wouldn’t use FDR’s template for an economic recovery. It only damages things and it gives whoever leads it unprecedented control.
All,
Here is the interview I was referring to:
and here’s what he said over the weekend about the derivatives going unregulated on his watch:
Like I said, Krugman should read the NYT once in a while!
I guess Paul needs to do yet another 5-year plan.
He may have to go back to Venezuela for a refresher.
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