Many seem taken aback by the depth and severity of the current financial turmoil. I was among several economists who saw it coming and warned about the risks.

There is ample blame to be shared; but the purpose of parsing out blame is to figure out how to make a recurrence less likely.

President Bush famously said, a little while ago, that the problem is simple: Too many houses were built. Yes, but the answer is too simplistic: Why did that happen?

One can say the Fed failed twice, both as a regulator and in the conduct of monetary policy. Its flood of liquidity (money made available to borrow at low interest rates) and lax regulations led to a housing bubble. When the bubble broke, the excessively leveraged loans made on the basis of overvalued assets went sour…

Read the entire commentary on CNN

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  1. Dear Kitty. Some blog :: Anti Bush demonstration in Peru :: November :: 2008 on November 22nd, 2008 12:06 pm

    […] PROTESTERS have demanded that US President George W Bush get out of Peru where he is attending an Asia-Pacific Economic Cooperation (APEC) summit, blaming him for the world economic crisis. […]

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