David Frum does an excellent job puncturing Josh Marshall’s hilarious contention that the Paulson plan is aimed at bailing out the “GOP’s Wall Street Friends.” Hardy–har–har. For an even more laughable bit of partisan finger-pointing, see Jim Cramer’s otherwise entertaining New York Magazine piece, “The Great Shakout.” Writes Cramer:
How was all of this allowed to happen? Where were the regulators, the agencies that rate these bonds, the early warnings to the investors that maybe this paper was more dangerous than the brokerages let on? First, not only was there no regulation to speak of at any level-federal, state, or local-but the much-worshipped Alan Greenspan and current Fed chairman Ben Bernanke actually encouraged this kind of securitization even as they raised rates ever higher, seventeen times, to stop the very house-price appreciation these securities depended on to be viable. They shared the Republican ideology that promoted homeownership for everyone-including those who couldn’t afford it-and minimal market regulation. [emphasis added]
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