Active Rain June 2, 2009

Paul Krugman’s Dishonesty

Paul Krugman is a lauded economist, but he leverages that credential to preach to the echo chamber that is the New York Times readership. In today’s screed, Krugman makes a big fat lie in his assertion that Ronald Reagan is to blame for our current economic problems. Everyone is entitled to their own opinion; they are not entitled to their own facts. My comment is as follows:

 As a real estate broker, I find the following quote problematic:

“Reagan-era legislative changes essentially ended New Deal restrictions on mortgage lending — restrictions that, in particular, limited the ability of families to buy homes without putting a significant amount of money down.”

This is disturbingly untrue. The New Deal introduced the FHA and the FHA-Insured mortgage program, which is the grandadaddy of all low down payment (3% in New York) mortgages. It is a good program, and its neglect during the Bush years created a vacuum in the market that was filled by the sub prime catastrophe.

Before the FHA, there were no mortgages that didn’t require a significant downpayment. FHA solved that and helped tens of millions into ownership responsibly. It was part of the solution.

It always disturbs my when Dr. Krugman leverages his credentials to make unsustantiated assertions to sate his hatred of Reagan, who chose not to keep him on the presidential advisory team in 1983.

I do not feel further elaboration is required. He lied. 

 Search the MLS like an agent here. New York’s Premier Short Sale REALTOR. Read my short sale bog here. See the New York Photo blog hereJ. Philip Serves Briarcliff Manor, Ossining, the River Towns, Westchester County, and the bedroom counties of New York City.