labyrinthworld.com Blog

December 20, 2007

Feds could have prevented housing meltdown

Filed under: Economy, Housing — Administrator @ 1:18 pm

According to a New York Times report, as early as 2001 Alan Greenspan had been warned about irregularities in the housing industry, but chose to ignore them.  Those who tried to warn him included Edward M. Gramlich, a Federal Reserve governor, and Sheila C. Blair, a senior Treasury official.  Had he listened this whole housing mess could have been avoided.

A reason for his indifference has to do with his and the federal reserve’s commitment to a freemarket ideology.  This is a commitment the White House shares.

A primary focus of free marketers is to make sure that industries keep making outsides profits, even if the profits are tainted by poor judgment and sometimes fraud.  This allegiance to ideology at the expense of sound economic judgment comes at enormous cost to not only individual homeowners, but also to the economy as a whole.  Those of us with limited income are particularly at risk.

 

1 Comment »

  1. Hi, this is a comment.
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    Comment by Mr WordPress — December 20, 2007 @ 1:18 pm

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