The shears and chainsaw event

Paul Krugman's column today on responsibility for the subprime mess includes a wild anecdote about deregulatory fever:

But Mr. Greenspan wasn’t the only top official who put ideology above public protection. Consider the press conference held on June 3, 2003 — just about the time subprime lending was starting to go wild — to announce a new initiative aimed at reducing the regulatory burden on banks. Representatives of four of the five government agencies responsible for financial supervision used tree shears to attack a stack of paper representing bank regulations. The fifth representative, James Gilleran of the Office of Thrift Supervision, wielded a chainsaw.

Also in attendance were representatives of financial industry trade associations, which had been lobbying for deregulation. As far as I can tell from press reports, there were no representatives of consumer interests on the scene.

This is the kind of stuff that people will look back on in horror in the future.

Comments

[Rob]

I don’t know who I feel sorriest for:

-- the people who were forced at gunpoint to buy houses they couldn’t afford and now face the prospect of having to move into houses they can afford

-- the people who refinanced their houses up to the last nickel of their value with every expectation that they could continue to refinance in ever-increasing amounts and treat their houses as a magical golden egg-laying goose

-- the people who were not informed that “adjustable rate mortgages” meant that rates were adjustable, or

-- the people who invested in mortgages made to borrowers with lousy credit and now find that many of those people have turned out to be poor credit risks.

So many victims--it’s every Democrat’s dream.

And a Merry Christmas to Brendan and all of his readers.