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August 22, 2007
Robert Reich and the Subprime Myth
Okay, Robert Reich finally tipped me over. Hearing him talking nonsense about subprime on NPR's irritating Marketplace program this afternoon convinced me that I have to write a column in the subject to make myself feel better.Damn that bastard Reich. Hate writing 770 words, unless I really have to.
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I assume you are refering to the segment where he says that when consumers can't tell whether or not something is risky or safe, they will respond by not buying anything. Therefore the Chinese need to better regulate their manufacturing industry so that consumers can have confidence that Chinese goods are safe, and similarly the US needs to better regulate its finance industry (he specifically mentions hedge funds) so that investors can have confidence that, I guess, the finance industry is also 'safe'.
Hedge funds? What? How exactly did the non-regulation of hedge funds lead to greater uncertainty about the true risk of various types of CDOs (aka the subprime meltdown)?
God help us if Robert Reich ever succeeds in making the finance industry 'safe'.
How many words yet?
Paul, Didn't here him today, but I had a fit myself listening to NPR on Monday. They reported on how high housing prices and consumer debt has fueled the economy.
Complete with this economic non sequitur:
'the average household owes more money than it makes'
http://www.npr.org/templates/story/story.php?storyId=13746138