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Whom to Thank for This Mess

Bad decisions starting in the '80s triggered the credit crisis

By Ambreen Ali, Newser User

Posted Dec 9, 2008 2:59 PM CST

(Newser) – This financial crisis brewed over decades of bad decisions, and, in Vanity Fair, economist Joseph Stiglitz makes sure credit is given where due:

In 1987 President Reagan appointed anti-regulation Alan Greenspan to a regulatory post.
Greenspan offered the markets a "flood of liquidity" that boosted inflation and caused two financial bubbles.
The Glass-Steagall Act was repealed in 1999, allowing commercial banks to become high-risk borrowers.

President Bush's tax cuts failed to bolster the economy, so the Fed lowered interest rates.
Soaring oil prices forced the US to spend hundreds of billions, funded through loans.
Accounting legislation ignored stock options, whose arbitrary value allows for balance sheets to be superficially inflated.
Treasury Secretary Henry Paulson haphazardly bailed out companies this fall, and still hasn't "addressed the underlying reasons" for frozen credit.

[Videos (1)]

Nobel Laureate Joseph Stiglitz says decades of bad decisions caused this crisis. (AP Photo/Manish Swarup, file)

Our market woes began not with Fannie Mae, but when Alan Greenspan, an anti-regulator, was appointed to run the Fed. (AP Photo/Evan Vucci)

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Stiglitz discusses the Wall Street bailout, saying Americans had a gun put to their heads. (madashelldude)

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COMMENTS

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Showing 3 of 10 comments

jaguarj

Dec 12, 2008 8:14 PM CST

That we are Charlie!!!!

Guest

Dec 11, 2008 7:49 PM CST

Please ignore the idiot behnd the beer. He is still frothing at the mouth because his old fogey lost. Best leave him be and let him spew his hate; he might explode if he can't expel it. (And we commies tend to be care-givers) lol

jaguarj

Dec 11, 2008 12:46 AM CST

Who gives a shit, who is married to whom..idiot. King..where do you come up with all the BS...Oh brilliant one!!!

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Alan Greenspan • tax cuts • Reaganomics • Joseph Stiglitz • bank regulation • deregulation • financial crisis • Wall Street bailout

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Whom to Thank for This Mess

Bad decisions starting in the '80s triggered the credit crisis