Reckless Endangerment

Paul H. Rubin —  13 June 2011

I just finished reading Reckless Endangerment: How Outsized Ambition, Greed, and Corruption Led to Economic Armageddon by Gretchen Morgenson and Joshua Rosner.  I really enjoyed the book.  It reinforced my prejudices that the crash was caused by government policy overemphasizing home ownership and imposing inefficient goals on private lenders with respect to providing mortgages to low income borrowers.

It is important to note that the first author, Gretchen Morgenson, is a business columnist for the New York Times.  It is no secret that this paper is a shill for the Democratic Party.  But this book blames the entire housing crisis and the subsequent collapse on Democrats.  The lead villain is James Johnson, head of Fannie May and a Minnesota Democrat associated with Mondale and Kerry.  The book begins with a 1994 statement by President Clinton.  Barney Frank (D., Mass.) plays a prominent role, as he should.  Many other democrats (including my non-relative Robert Rubin) play prominent roles.  President Bush is only mentioned a few times, and often as attempting to stop the craziness.  Juen O’Neill (now at Baruch College) is one of the few heroes in the book.

The book is more favorable to regulation than I might be, but there is no doubt that increased regulation in the period before the collapse would have been good.

Overall, the Republican Presidential candidates should use this book as a counterweight whenever President Obama tries to blame the collapse on President Bush

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Paul H. Rubin

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PAUL H. RUBIN is Samuel Candler Dobbs Professor of Economics at Emory University in Atlanta and formerly editor in chief of Managerial and Decision Economics. He blogs at Truth on the Market. He was President of the Southern Economic Association in 2013. He is a Fellow of the Public Choice Society and is associated with the Technology Policy Institute, the American Enterprise Institute, and the Independent Institute. Dr. Rubin has been a Senior Economist at President Reagan's Council of Economic Advisers, Chief Economist at the U.S. Consumer Product Safety Commission, Director of Advertising Economics at the Federal Trade Commission, and vice-president of Glassman-Oliver Economic Consultants, Inc., a litigation consulting firm in Washington. He has taught economics at the University of Georgia, City University of New York, VPI, and George Washington University Law School. Dr. Rubin has written or edited eleven books, and published over two hundred and fifty articles and chapters on economics, law, regulation, and evolution in journals including the American Economic Review, Journal of Political Economy, Quarterly Journal of Economics, Journal of Legal Studies, and the Journal of Law and Economics, and he frequently contributes to the Wall Street Journal and other leading newspapers. His work has been cited in the professional literature over 8000 times. Books include Managing Business Transactions, Free Press, 1990, Tort Reform by Contract, AEI, 1993, Privacy and the Commercial Use of Personal Information, Kluwer, 2001, (with Thomas Lenard), Darwinian Politics: The Evolutionary Origin of Freedom, Rutgers University Press, 2002, and Economics, Law and Individual Rights, Routledge, 2008 (edited, with Hugo Mialon). He has consulted widely on litigation related matters and has been an adviser to the Congressional Budget Office on tort reform. He has addressed numerous business, professional, policy, government and academic audiences. Dr. Rubin received his B.A. from the University of Cincinnati in 1963 and his Ph.D. from Purdue University in 1970.

3 responses to Reckless Endangerment

  1. 
    John 14 June 2011 at 7:20 pm

    Larry, your right—the really stupid investments by people at places like Deutsche Bank AG and AIG were caused by Fannie and Freddie

    The book if fiction, as is your post.

  2. 
    Bill 14 June 2011 at 11:08 am

    Finale a book that exposes what happened and who is the cause. Now that we know what happened we may have a chance at correcting some of the damage. This has been hiding under a rock for too long.

  3. 
    Walter Sobchak 13 June 2011 at 9:37 pm

    Score one for Peter Wallison:

    http://www.aei.org/paper/100190