I began the day reading Alan Blinder’s After The Music Stopped: The Financial Crisis, The Response And Work Ahead, which was published in 2013. Blinder is professor of economics at Princeton University, was a member of Bill Clinton’s Council of Economic Advisors and served as Vice Chairman of the Federal Reserve in the mid 1990s.
According to Blinder the Federal Reserve was not responsible for causing the housing bubble. He cites the usually culprits for the housing meltdown, greed on Wall Street and lax regulations among other factors. Blinder’s analysis so far is wanting, to say the least. He does, however, provide a lucid narrative of the facts surrounding the unfolding of the financial crisis.
As a former Fed to honcho, it is not surprising Blinder gives the Fed a pass for causing the housing bubble. When I finish the book I will report on his conclusions.