Jeff Madrick and Frank Partnoy, writing in The New York Review of Books, call out Gretchen Morgensen and Joshua Rosner for their egregious attempt to re-write the history of the financial crisis:
Along with many other experts, the nine members pointed to considerable evidence that, despite large losses, these government-sponsored enterprises (GSEs) [Fannie Mae and Freddie Mac], as they are known, bought or guaranteed too few highly risky loans, and did so too late in the 2000s, to cause the crisis. But in their new book, Reckless Endangerment, the New York Times reporter Gretchen Morgenson and mortgage securities analyst Joshua Rosner try to revive the issue of their responsibility.
The book boldly and passionately asserts that the risk-taking of Fannie Mae and Freddie Mac was a major element in causing the housing bubble. In particular, the authors blame the crisis on the goals set by the Clinton administration in the early 1990s to make lending “affordable” to more middle- and low-income home buyers. These goals were raised several times over the next dozen years so as to include more people, with the result that loans became cheaper. The authors write, “The homeownership drive helped to plunge the nation into the worst economic crisis since the Great Depression.” They add, “How Clinton’s calamitous Homeownership Strategy was born, nurtured, and finally came to blow up the American economy is a story of greed and good intentions, corporate corruption and government support. (emphasis added)”
This bold claim, however, is not substantiated by persuasive analysis or by any hard evidence in the book.
The problem with this country is not the partisan tone of its politics. It’s that certain people feel empowered to lie with the certainty that they won’t suffer any repercussions. So, here’s my best effort to provide the appropriate repercussions: Morgenson and Rosner are liars.
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