This is a topic on which I am doing some research.
After reading I thought PK was far too gentle on Reagan. However the article mentions Reagan and his advisors. Who were Reagan’s advisors? Some info is in the comments:
Reagan’s circle didn’t include only men. One of the worst architects of the financial disaster was Wendy Gramm, whom he called his “favorite economist,” Gramm, wife of Phil Gramm, was appointed by Reagan to head the Commodity Futures Trading Commission. Among other things, she worked diligently to protect the growing derivatives market from regulation, including shielding energy derivatives from regulation at the behest of Enron. At the end of the Reagan/Bush era, she left the CFTC to become a board member of Enron. We know how that turned out. Of course, she teamed up with her hubby to continue the march to deregulate derivatives, culminating in his insertion of the Commodity Futures Modernization Act into a last-minute must-pass spending bill.
The housing bubble and sub-prime market collapse was bad, but it was the credit default swap derivatives and other undercapitalized, unregulated derivatives that toppled the whole house of cards, and it couldn’t have happened without Reagan and the Gramms.
— Eric E., Hood River, OR
Yep. Reagan, Stockman (David) and other advisors set out to destroy the social safety nets and the protections that permitted ordinary people to save for retirement without being defrauded. They succeeded.
Somehow it is not very satisfying to say “I told you so.”
— Rachel, California
Fernan St. Germain, co-sponsor with Jake Garn (R-UT) of the Congressional Act referenced by Dr. Krugman, was a DEMOCRAT and the Act passed with broad bi-partisan support. In the House of Representatives, it was co-sponsored by CHUCK SCHUMER and STENY HOYER where it passed the Democratically controlled body by a vote of 272-91.
And what was the stepping stone to this “New Deal” betrayal? Jimmy Carter’s signing of the “Depository Institutions Deregulation and Monetary Control Bill” which, according to John Birger ( http://money.cnn.com… )
“…abolished state usury caps that had limited the interest rates banks could charge on primary mortgages – and, in the process, gave banks more incentive to make home loans to folks with less-than-perfect credit.
DIDMCB… did open the door to some predatory lending in low-income communities… deregulated the mortgage market and made home loans more available.”
I have never voted for a Republican in my life and Jimmy Carter was the first President I voted for as a naive young man. My point is not to defend Reagan and the GOP but to insist that NONE of it could have been accomplished without the help of Congressional Democratic majorities who very much participated in the destruction of the New Deal – the very foundation of the Democratic Party.
Nothing will change, Dr. Krugman, if we fail to acknowledge that our current economic downfall was a not just a GOP engineered event. It has resulted from the failure of our DEMOCRACY and won’t be fixed until we have a Democratic Party dedicated to Main Street – and the moral principles behind FDR’s New Deal – not Wall Street.
— pugg squaar, manhattan
That’s enough for now.