A while back, I wrote that the efforts to connect the war and the recession are politically astute. I still feel that way. But Dean Baker makes an important and understated point in this post. But junk food and laziness don't give you pneumonia, and the war did not give us this housing bubble and the inevitable crash. The villains in this story are the economists who somehow couldn't see an $8 trillion housing bubble, the banks that fueled the bubble with bad and often predatory loans, the regulatory institutions that did nothing to prevent the growth of the bubble and the spread of predatory loans, and most of all, Alan Greenspan and the Fed who blessed the whole thing. Thousands and thousands of Americans were forced out of their homes and our economy is reeling thanks to a few opportunists and the breakdown of our regulatory system. To learn from our mistakes, we must hold those people responsible and not just use their manipulations for political gain. As Nomi Prinn writes, companies like Lennar Corporation may be a good place to start.As with many companies, there's nothing in Lennar's public data that reeks of mischief. The point is that even as their market imploded, big housing companies were claiming puzzlingly positive results, playing down the mayhem any intelligent ceo knew was imminent, and ultimately setting up the economy for a rude awakening.
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Adam Doster, a contributing editor at In These Times, is a Chicago-based freelance writer and former reporter-blogger for Progress Illinois.
