I pretty much stopped reading Amity Shlaes' columns on Bloomberg a couple years ago. She has become the queen of revisionist history. I stopped reading her when she actually said that FDR had nothing to do with getting us out of the Depression; if we had just kept following the economic policies of Cal Coolidge the Depression would have been over in no time. Really...I'm not making this up. Talk about revisionist history!
Well, I didn't learn my lesson well enough I guess. I read her op-ed column today. It's her take on the mortgage interest deduction. There are good arguments to be made for getting rid of the deduction, but her analysis of the housing crash is just another bit of revisionist history. Guess who were the only causes of the housing crash? You guessed it...Freddy, Fanny, and the Fed. In other words, it was all the fault of government.
Earth to Amity...The housing crisis in its enormity was caused by (1) the reckless securitization of mortgages; (2) rating agencies that rated these securities AAA; (3) derivative products that were designed and sold to "guarantee" these securities; and (4) the fact that such products were totally unregulated. All four of these issues were failures of the private sector. It didn't happen because of too much government; rather, there wasn't enough government regulation. It's hard for the true believers like Ms. Shlaes to own up to this fact, because it is a matter of religion to them that every problem is cause by government.
Freddy, Fanny, and the Fed all have existed for many years. Isn't it ironic that Glass-Steagall is repealed and the bill to regulate the types of derivatives I mentioned above was defeated, and a relatively few years later we have the biggest financial meltdown and housing crisis since the Depression? Trying to blame it on Freddy, Fanny, and the Fed is the ultimate revisionism.
It was my own fault for actually wasting my time by reading the column.
No comments:
Post a Comment