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Home Publications Blogs Beat the Press Donald Kohn Doesn't Think the Fed Did Anything Wrong

Donald Kohn Doesn't Think the Fed Did Anything Wrong

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Sunday, 05 September 2010 22:24

That should have been the headline of an article about Donald Kohn who is leaving the Fed's board of governors. Kohn said that he doesn't think the Fed could have done anything different to prevent the worst downturn in 70 years because:

"Everybody — but certainly the regulators and the markets — became complacent about the housing market and whether housing prices could ever decline across a broad front.”

He still doesn't know that the housing crash was entirely predictable? Why are the taxpayers paying for this guy's pension?

Comments (5)Add Comment
Entirely Predictable
written by James, September 06, 2010 2:01
is different than easily predictable.

You should know in this country, the higher you are in an organization, the lesser culpability. The wise guys who lost million for their firms simply moved onto a different WS firm and start securitizing assets again.

Past failure is all due to external factos that no one could see.
...
written by Ben Ross, September 06, 2010 8:38
Selective memory! This is the man who in 2005 was sitting up front as a commentator on Raghuram Rajan's famous warning and [http://www.federalreserve.gov/boarddocs/speeches/2005/20050827/default.htm]dismissed[/http://www.federalreserve.gov/boarddocs/speeches/2005/20050827/default.htm] it.
...
written by zinc, September 06, 2010 9:18
"Everybody — but certainly the regulators and the markets — became complacent about the housing market and whether housing prices could ever decline across a broad front.”

What Don is saying, IMO, is " we were asleep on guard duty, not our fault. It was late at night, and we were ordered to do it."

Why are the taxpayers paying for this guy's pension?
written by cemmcs, September 06, 2010 9:56
Well, how else will the guy get by after we cut Social Security?

...
written by flow5, September 06, 2010 2:03
Anyone who has followed Kohn's speeches wouldn't be surprised. He is among the worst of all FED governors.

The BOG's actual record is horrific: Greenspan never "tightened" monetary policy towards the end of his term. Despite raising the FFR 17 times, Greenspan maintained an extremely "loose" money policy, i.e., for the last 41 consecutive months of his term.

Bernanke didn't initiate an more expansive monetary policy when Bear Sterns 2 hedge funds collapsed. Instead, Beranke initiated "credit easing" while continuing with his 25 consecutive months of policy "tightening" that began in Feb 2006 (29 before the revision). Instead Bernanke waited until Lehman Brothers failed. Bernanke drove this country into a deep depression by himself.

And he's on the cusp of doing it in the 4th qtr.

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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.

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