I Don’t Look Anything Like Aaron Altman

Great post, as usual… one little nit picking note though:

You wrote:

“Baker was one of the few economists to have seen the current crisis coming”

and I’ve got to disagree with that. He was one of the few some-what prominent economists to see it coming (although obviously not prominent enough). But at least half the economics proffesors in the country, if not at least a third of the economics grad students, heck I would wager at least 1 in 5 economics undergrads, saw the current crisis coming a long way off. I mean, well informed non-economists were warning about exactly our current predicament as early as 2005.

There are hundreds, if not thousands, of economists, journalists, public servants, and bloggers who could see the writing on the wall of the housing bubble just as it began to expand unreasonably in 2002 and 2001.

The idea that the only a few people saw this thing comming is one that we need to, as progressives, be pushing back against.

The current crisis is one that almost no one in the Beltway media saw coming, no one on CNBC saw coming, and one that few elected officials saw coming (a handful of notable exceptions in the senate, and a couple more dozen exceptions in the house).

But that doesn’t mean a hell of a lot of people outside of DC and New York weren’t warning us years and years ago.

We’re in a giant and complex crisis for sure. But the causes of the crisis are simple. They’re related primarily to five things:

1) An intentionally artificially inflated housing market,

2) Major banking–insurance–securities deregulation in the late 90s and early ’00s,

3) Massive overspending w/out corresponding tax increases, (largely caused by some giant tax giveaways to the rich and to large corporations + an incredible increase in “defense” spending, i.e. the wars)

4) A giant trade deficit (made much larger by many 90′s era trade deals, especially the China deal in ’99) and

5) Eight years of criminally lax federal oversight of our financial, housing, and insurance arenas.
———————-

There have been plenty of progressive voices that for the last decade have been fighting in these 5 areas. Those progressives have, time and again, warned of the consequences of bad choices (the china deal, the 2001 tax cuts, the war…) and have been time and again, unfortunately for our great country, those voices- ridiculed at the time- have been vindicated.

There have been even more progressives voices speaking out about the consequences of not taking corrective action in a number of areas (trade deficit, declining middle class wages, housing bubble, FEC oversight…) and those voices have been perennially cast as gadflies and chicken-littles, despite being, again unfortunately, vindicated.

Finally, for the last 3-5 years there have been a plethora of progressive voices warning that the current confluence of events, especially the big five listed above, were going to spell impending doom and a market failure + depression like none we’ve seen since the 30s….

It brings me no pleasure that the progressives were right about all this, and the mainstream culture that ridiculed us was desperately wrong.

But now that we’re in this mess it’s important to vocally remind people that there were plenty of progressives who saw all this coming from a mile away. It’s important not because we need vindication or because we want to play political games, but because we need to make sure our future course is plotted by the people with track records worth trusting.