Its the morning for good headlines! Paul Krugmans column today is titled, Springtime for Bankers -- perfect! -- and he goes after former Treasury Sec. Tim Geithners new book Stress Test. Hes a man who, as Krugman writes, basically thinks he did a heckuva job and he asks, How can people feel good about track records that are objectively so bad? He then explores the record of a man who helped restore the financial health of bankers, but not of ordinary Americans. Here are his final paragraphs. Tom “Stress Test asserts that no conceivable amount of mortgage debt relief could have done much to boost the economy. But the leading experts on this subject are the economists Atif Mian and Amir Sufi, whose just-published book House of Debt argues very much the contrary. On their blog, Mr. Mian and Mr. Sufi point out that Mr. Geithner’s arithmetic on the issue seems weirdly wrong — order of magnitude wrong — giving much less weight to the role of debt in holding back spending than the consensus of economic research. And that doesn’t even take into account the further benefits that would have flowed from a sharp reduction in foreclosures. In the end, the story of economic policy since 2008 has been that of a remarkable double standard. Bad loans always involve mistakes on both sides — if borrowers were irresponsible, so were the people who lent them money. But when crisis came, bankers were held harmless for their errors while families paid full price. And refusing to help families in debt, it turns out, wasn’t just unfair; it was bad economics. Wall Street is back, but America isn’t, and the double standard is the main reason. nytimes/2014/05/19/opinion/krugman-springtime-for-bankers.html
Posted on: Mon, 19 May 2014 13:50:40 +0000
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