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The NYT, Ben Bernanke, and the $8 Trillion Housing Bubble
As the economy is being pushed into a recession by the collapse of housing bubble, everyone now agrees that it is a serious problem. So how can the NYT publish a 10 page magazine piece on Ben Bernanke and not ask him about why he failed to recognize the bubble, either in his stint as a Fed governor or in his first year and a half as Fed chair?
The evaporation of much or all of the $8 trillion in excess housing wealth created by the bubble is creating the largest financial crisis since the Great Depression and might well lead to the most serious recession since World War II. While Greenspan, as Fed chair, must carry the primary responsibility for failing to take steps to stem the growth of the bubble before it reached such dangerous dimensions (arguably, he promoted its growth), given his position as a Fed governor, Bernanke must share part of the blame.
It is remarkable that the NYT did not even think to ask about this failure. It may have seemed rude, but a serious piece cannot ignore such an enormous issue. After all, even in Washington, $8 trillion is real money.
--Dean Baker
COMMENTS (4)
It is remarkable that the NYT did not even think to ask about this failure.
SG: When it comes to 'laissez faire' capitalism and accountability, the co(R)po(R)ate media is a pretty 'lazy affai(R)' ... Co(R)po(R)ate complicity, I suppose, but that's the f(R)ee-dumb you get when you substitute 'f(R)ee ma(R)ket' ideology for the 'freedom' of actual democracy.
Ame(R)ika ... the best democ(R)acy, and judges, and voting machines, and vote(R) suppression, and unending wa(R), and divisive amoral 'values', money can buy.
Snerd
Posted by: Snerd Gronk | January 19, 2008 6:03 PM
We just need another bubble to get us through the next few years. Hopefully the combination of lower interest rates and the stimulus package will get us started in the right direction. I wish I knew what industry it was going to happen in so I could make my pot of money!
Posted by: Anonymous | January 20, 2008 2:04 AM
8 trillion is not real money in DC. they are still ignoring the 65 trillion floating out there in space. see st. louis fed.
Posted by: anon | January 23, 2008 1:32 AM
I can't believe that Greenspan, Bernanke, and everyone in Washington with an IQ above 50 didn't see this bubble coming - plus they had plenty of responsible people like Dean Baker screaming it from the roof tops. The only thing that still amazes me is that the media isn't demanding to know WHY the policy makers blew the bubble in the first place, knowing of the horrible national fallout that would ensue (note Greenspan's timely departure).
Posted by: neil | January 25, 2008 1:06 PM