USAToday quotes Treasury Secretary Henry Paulson as saying that the recent run-up in house prices was unsustainable and that a correction is "inevitable and necessary." "Mr. Paulson called the current housing correction inevitable after what occurred during the five-year boom in which sales and prices climbed to record levels. 'After years of unsustainable price appreciation and lax lending practices, a housing correction is inevitable and necessary,' Mr. Paulson said." This raises the obvious question -- why didn't Paulson and others in positions of power recognize that this sharp run-up in house prices was unsustainable? Isn't this part of their job? Or, if they did recognize it, why didn't they warn the public? In fact, they were still encouraging people to buy homes in the middle of this bubble, including moderate income people who just threw away their life's savings. The media should be asking Paulson, Greenspan and the others these very pointed questions. Why aren't they?
--Dean Baker
