From Paul Krugman* today: “By the way, in saying that our prolonged slump was predictable, I’m not saying that it was necessary. We could and should have greatly reduced the pain by combining aggressive fiscal and monetary policies with effective relief for highly indebted homeowners: the fact that we didn’t reflects a combination of timidity on the part of both the Obama administration and the Federal Reserve, and scorched-earth opposition on the part of the G. O. P.”
This brings us back to Rick Santelli on February 21, 2009, when he famously asked, “Do we really want to subsidize the losers’ mortgages? This is America! How many of you people want to pay for your neighbor’s mortgage that has an extra bathroom and can’t pay their bills?”
The answer to that was a resounding “Hell, no!” and the start of the Tea Party, but Santelli asked the wrong question. He should have asked “How many of you people want to lose 30, 40, 50% of the value of your homes? How many of you people want to lose your jobs because of the worst economic meltdown since the Great Depression? How many of you people want to then lose your homes because, just like your neighbor now, you won’t be able to pay your bills?”
The truth is that because we got so obsessed with “moral hazard,” so determined not to coddle those damn “losers,” we all became losers. If we’d loved our neighbor a little more, we would have all been better off. Instead of lifting them up, we dragged ourselves down.
With all our politicians who constantly quote the Bible at us, where was Mike Huckabee or Michele Bachmann or Rick Santorum reminding the self-righteously righteous that the rain falls equally on the good and the bad?
* “The Optimism Cure,” NYT
Everyone botched it.
The tea party of course had the stupid response of cutting off their noses to spite their faces, but Obama too is to blame for appointing a do nothing incompetent attorney general. Holder should have from day one gone after the big wigs who caused the mortgage crisis and the bankers and Wall Steeet who sold off the worthless dirivitives and caused a works financial meltdown.
There’s plenty of blame to go around.