Monday, July 29, 2013

Quote of the Day

""The policies he promoted as Treasury Secretary and in his subsequent writings led to the economic disaster that we now face." Dean Baker, economist, on Lawrence Summers.

Baker correctly predicted there there was a housing bubble in 2002. Banks continued to create risky mortgage-backed securities.

Summers pushed for the repeal of Glass-Steagall Act. This allowed investment banks to merge with commercial banks. The result was banks making bad investments with people's life savings. This nearly caused the banking system to crash.

I think we can safely say that Baker is a smarter economist than Summers.

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