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Who is responsible for this recession? Paul Krugman blames the Gipper.

“This bill is the most important legislation for financial institutions in the last 50 years. It provides a long-term solution for troubled thrift institutions. … All in all, I think we hit the jackpot.” So declared Ronald Reagan in 1982, as he signed the Garn-St. Germain Depository Institutions Act.

// He was, as it happened, wrong about solving the problems of the thrifts. On the contrary, the bill turned the modest-sized troubles of savings-and-loan institutions into an utter catastrophe. But he was right about the legislation’s significance. And as for that jackpot — well, it finally came more than 25 years later, in the form of the worst economic crisis since the Great Depression.

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One Comment

  1. Krugman denies the real history of financial deregulation and creates his own morality tale. Inflation was killing us so badly that no with half brain would put their money in a heavily regulated 1970’s bank. This all comes from the man that extols the “virtues” of inflation and tells of the “paradox of thrift”.


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