Trump's hiring Bear Stearns economist who promised the economy was fine right before it went...
Trumps hiring the Bear Stearns economist who promised the economy was fine right before it went bankrupt
Famous last words: Dont panic about the credit market.
Updated by Matthew Yglesias@[email protected] Mar 15, 2017, 1:30pm EDT
David Malpass, a veteran of two previous Republican Party administrations as well as a former chief economist for the now-defunct investment bank Bear Stearns, has been nominated to serve as undersecretary of Treasury for international affairs. Its a critical crisis management role in the federal government, and one that Malpass certainly has the broad résumé for.
But despite decent paper credentials, Malpass has a striking track record of poor judgment about major economic issues over the past decade cheerleading the economy on the verge of the Great Recession while warning of a collapse just as recovery was getting underway.
In August 2007, for example, the housing market had been cooling for a year or more, and it was becoming clear that economic problems were going to spread to some of the financial institutions that had invested heavily in mortgage-backed bonds. Stocks were sliding, and overall credit was drying up in some markets. Into the breach stepped Malpass, then of Bear Stearns, with a reassuring Wall Street Journal op-ed titled
Dont Panic About the Credit Market, urging the Federal Reserve and other policymakers not to overreact.
It's frowned upon to look for a silver lining when markets tumble and painful losses accumulate, he observed, but the housing- and debt-market corrections will probably add to the length of the U.S. economic expansion.
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http://www.vox.com/2017/3/15/14596938/david-malpass-treasury