The IUSB Vision Weblog

The way to crush the middle class is to grind them between the millstones of taxation and inflation. – Vladimir Lenin

IUSB Vision Mortgage Crisis Analysis Vindicated by New Book – Reckless Endangerment: How Outsized Ambition, Greed, and Corruption Led to Economic Armageddon

Posted by iusbvision on August 9, 2011

In Reckless Endangerment, Gretchen Morgenson, the star business columnist of The New York Times, exposes how the watchdogs [Barney Frank & Chris Dodd] who were supposed to protect the country from financial harm were actually complicit in the actions that finally blew up the American economy.

Drawing on previously untapped sources and building on original research from coauthor Joshua Rosner—who himself raised early warnings with the public and investors, and kept detailed records—Morgenson connects the dots that led to this fiasco.

Morgenson and Rosner draw back the curtain on Fannie Mae, the mortgage-finance giant that grew, with the support of the Clinton administration, through the 1990s, becoming a major opponent of government oversight even as it was benefiting from public subsidies. They expose the role played not only by Fannie Mae executives but also by enablers at Countrywide Financial, Goldman Sachs, the Federal Reserve, HUD, Congress, the FDIC, and the biggest players on Wall Street, to show how greed, aggression, and fear led countless officials to ignore warning signs of an imminent disaster.

Many IUSB Vision readers will remember substantive multi-part analysis which had gone viral on the internet with some of our posts on the subject still getting hundreds of hits per day; these posts being the most popular - HEREHEREHEREHEREHEREHEREHEREHERE and HERE.

Last year famed economist Dr. Thomas Sowell published his best-selling tome of the mortgage collapse Housing Boom & Bust which told what happened in an analysis that very closely matched ours. Some of our critics might say that this is no surprise because the editors of this website and Dr. Sowell are very like-minded, but the critics did not expect Reckless Endangerment.

This new book from the New York Times business columnist also tells the story almost point per point as we told you right here at IUSB Vision, with the exception of how we saw the modification of Glass-Steagal with the Gramm-Leach-Bliley bill. Partisan leftist Robert B. Reich’s review of this book tells several important parts of the same story that we did (and I am sure he didn’t like it), and The American Interest says that Reckless Endangerment could bring about the end of the Democratic Party itself.

Campus leftists who said that our analysis of the mortgage collapse was just partisan rhetoric can stick this in your pipe and smoke it. Our analysis has been confirmed by sources from the left and right, as well as financial publications such as the Wall Street Journal, Investors Business Daily, Forbes etc. While the New York Times took a different view during the campaign season to help the Democrats, outside of the campaign season the NYT has done some top rate analysis on this issue which they deserve credit for. We told you in our analysis that the New York Times predicted in 1999 that this collapse could happen and published the Republican attempts to fix the problem since 2001.

We have been vindicated. As IUSB Vision Editor I also feel vindicated as I spent countless hours of research and sleepless nights to bring you such an accurate analysis early on in the collapse. We are pleased that our analysis has stood the test of time and is still considered one of the best abridged online sources of this crisis available on the internet.

Here is a 30 minute interview with Dr. Sowell on Housing Boom & Bust which we believe is a must see to get insight on the issue –

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