The Three Reasons

Here is the link to the entire article,
http://www.openleft.com/diary/12800/nprs-planet-money-guys-feed-rachel-maddow-a-snow-job
And here is the opening gambit.:

NPR's "Planet Money" Guys Feed Rachel Maddow A Snow Job (+)
by: Paul Rosenberg
Sun Apr 12, 2009 at 13:45
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On Friday, Rachel Maddow was all set to tear further into the absurdity of GOP stimulus rejectionism, when she got sideswipped by a pair of NPR bozos, Adam Davidson and Alex, from NPR's Planet Money podcast (no link for these losers). A quick Google shows that Maddow had Blumberg as a radio show guest back on September 22, to discuss the then-three-page bailout plan, so there's at least some history there. But it's doubtful she had any idea what she was in for with these journalists, touted for explaining economics in terms "regular people" can understand--Gosh, and here I thought Paul Krugman, Dean Baker, and dozens, if not hundreds of other real economists already did that. I surely would have loved to had Krugman or Baker on with Maddow when these jokers were spouting their stupid speil, essentially laying down covering fire for SC Governor Stanfords complaint that "Going further into debt will not solve a problem that was created by too much debt."
Then there is this summary:

In a nutshell, here are the 3 big lies these guys are pushing:
(1)'The problem was caused by debt.'
(2) It's a multi-factor problem, so no one should be blamed.
(3) Deregulation in general, and repealing Glass-Spiegal in particular was not really a major factor.

If you read the whole article, and then read the comments, it is 1)curious how immediately dismissive Mr. Rosenberg is of the entire interview, and 2) how many angry commenters agree with the assessment. However….

“The problem was caused by debt” .Well, yes it was. Krugman, Reich, Galbraith and Greider all say so. It is a fact which is hard to ignore. The banks, investment banks and big guns like AIG, Goldman Sachs and Solomon Bros. et.al. kept borrowing money on borrowed money without the collateral required to bolster them. That is why the transactions were called “credit default swaps”. Everyone was betting on the fact that the credit arrangements would not go into default. But without reliable underpinnings, they were destined to crash, mostly because the billions in outstanding home mortgages were overblown, under-collateralized and sold at sub-prime to people who could not make the payments. Pile credit card debt on top of that (also without collateral backing) and then introduce unemployment, caused by a decrease in consumer demand and the debt load and obligations of big manufacturers like GM, and what follows is a big downward slump of gigantic proportions. These boys are right: in large part, this great reckoning WAS caused by debt and turning a blind eye to the monster it had become. Hell. If all else fails, borrow some more money. That of course raises the question of the wisdom of Geithner borrowing even more to solve the problem. Hmmmm…

It is a multi-factor problem so no one should be blamed. Well DUH!!!! Of course it is! But this was not expressed properly: in truth, everyone is to blame because everything is connected to everything else. Everybody piled on the bandwagon, everybody played the game and everybody made their own contribution by going deeper intodebt. The homeowners borrowed from the banks, the banks and mortgage companies borrowed from each other and the government borrowed from the rest of the world (mostly China). In the end, nobody had the cash to pay the bills and we are all suffering the consequences. As a group, Americans want to have one villain, one cause, one single source to blame, deride and hold accountable. It simply is not that simple. Everyone contributed to the stew we cooked up, and while some are more guilty than others (like the Wall St. greedy-monsters, Bernie Madoff, mortgage brokers, etc.), mom and pop with a $500,000 mortgage that they could only afford with two jobs (one of which they lost), three SUV’s and a personal debt load they could not support, and their kids in college carrying credit cards they had no business having, the Chinese bankers who loaned the money and the failure of the overseers to over see, all pitched in. Then the boat pitched over. These two guys pointed out, very clearly, that “lots of people, doing lots of thing independently, thinking they were doing the right thing at the time, taken together, added up to what we have now” (That is an approximate quote).

Deregulation…in general…was not a factor. While many people have laid much of the blame squarely at the feet of the repeal of Glass=Spiegal ( and well it should be), that one piece of legislation was only one cog in the gear of the great financial machine that got bound up when everyone’s assorted shoes got thrown into the machinery. We were already using an antiquated banking system, handed down to us by the Europeans and the Bank of London, and when we laid off or transferred regulators, followed the blind un-wisdom of trickle down economics, played games with tax formulations that saved us after the Great Depression and let the banks, finance companies and insurance companies co-mingle funds without oversight and safety nets, we were doomed to some eventual downfall. It does not take a genius to figure that one out.
This interview was not all that bad. These guys speak in relatively plain English and don’t make any attempts to spin or hype anything. They do, however, sport a genuine “transparency” that we were supposed to get from the Obama/Geithner gang, which has thus far been completely missing in action. Rachel let them go and left us to our own devices and conclusions. Would you rather listen to this discussion or to Newt Gingrich or Eric Cantor or Sarah Palin tell you what’s wrong with the economy? Here: have a tax cut. That will fix everything.