By Stephen Moore
My 13-year-old son told me at the dinner table the other day that Franklin Roosevelt was one of America’s “greatest presidents” because “he ended the Great Depression.” He’s usually a good student, so I checked where he got this tripe and sure enough the fairy tale was right there in his American history book.
Sure enough his text book tells kids that the New Deal ended the Great Depression and even saved capitalism. Of course the New Deal exacerbated the pain and financial devastation of a stock market crash, and unemployment lingered in double digits for a decade after Roosevelt was elected until the start of World War II.
We get this kind of rampant revisionism because the left writes the history books — which they are doing right now.
Here’s the latest story line: bailouts, trillions of dollars of government spending and debt, easy money, and re-regulation of Wall Street ended the 2008 Great Recession. The myth took on new life last week when Ben Bernanke took a bow in The Wall Street Journal for in his mind saving the economy with his $3 trillion of quantitative easing and zero interest rate policy. No, actually this is what created the crisis. Don’t be surprised if Mr. Bernanke receives a Nobel Peace Prize.
As Peter Wallison of the American Enterprise Institute and other scholars have thoroughly documented, the crash of 2008 was caused by the Federal Reserve’s easy money policies for nearly a decade, government housing policies that led to preposterous mortgage loans being issued, and massive overleverage of government, companies, and households.
Now, Fannie Mae and Freddie Mac are engaged in the same low interest rate lending mania of 2004-07 and the Obama administration is on a Bush-like home-ownership push. Some Republican House heroes like Jeb Hensarling of Texas wanted to eliminate taxpayer subsidies to Fannie and Freddie but the housing lobby kept them alive. So now the two government enterprises are back issuing taxpayer guarantees on mortgages with as little as 3 percent down payment. Have we learned nothing at all? (my emphasis)
READ all of Stephen Moore’s comments from the The Washington Times here.