1-22-15 – Bernie and the Wall Street Crash of 2008

by John McClaughry

Bernie Sanders put out a TV ad last week in which he discourses on his notion that the 2008 economic crash was caused by the greed of the ultra-rich on Wall Street, and the failure of weak regulatory policies. I’m sure Bernie absolutely believes this – as do all of the Democrats – because it is essential to their world view, and necessary to support their big government remedies.

Yes, people on Wall Street are always looking for opportunities to make money. But the hard facts of the 2008 economic crash completely contradict the Sanders view of the matter.

The Wall Street crash was caused by years of national government leaders pressuring Wall Street and other investors to buy crappy subprime mortgages, and when the mortgages failed,  they organized the bailout.

This isn’t just my biased view. There are three good books that explain all this in detail. Gretchen Morgenson and Joshua Rosner of the liberal New York Times wrote Reckless Endangerment. Former Treasury general counsel Peter Wallison wrote Hidden in Plain Sight; and conservative Peter Ferrara wrote America’s Ticking Bankruptcy Bomb. I know the last two authors and I reviewed the Morgenson-Rosner  book in Reason magazine (December 2011).

Who are the people responsible for the crash?: William J. Clinton, Barney Frank, Chris Dodd, James A. Johnson, Robert Rubin and Larry Summers, Franklin Raines, Henry Paulson, and, largely by omission, George W. Bush.

Bernie’s entitled to his opinion, but not to his own set of facts.

– John McClaughry is the founder and vice president of the Ethan Allen Institute

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The Ethan Allen Institute is Vermont’s free-market public policy research and education organization. Founded in 1993, we are one of fifty-plus similar but independent state-level, public policy organizations around the country which exchange ideas and information through the State Policy Network.

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