I hate to make a whipping boy out of Ben Bernanke, he came into an impossible situation, but this is someone who has minimized the problems of the housing market at every turn. Before he took his post as Fed chairman he told the Washington Post that there was no housing bubble. In March of last year he told Congress that the problems in the subprime mortgage market were "likely to be contained" and not spread to the larger economy. After missing the last Bear Stearns, Bernanke told Congress that he doesn't anticipate another Bear Stearns. And now that we seem to be seeing something that looks a lot like Bear Stearns at Fannie Mae and Freddie Mac, Bernanke tells us not to worry. USA Today should have provided some of this background when discussing Mr. Bernanke's expression of confidence in Fannie and Freddie. [Addendum: I should have pointed out that the reference to Bernanke offering assurances on Fannie and Freddie was in the headline (since changed), not the article itself.]
--Dean Baker
