Former Treasury Secretary Robert Rubin was at a session at the Brookings Institution this morning at which said that "few, if any" people anticipated the sort of meltdown that we are seeing in the credit markets at present. This should be newsworthy. Mr. Rubin is not only a former Treasury Secretary, he is in the top management at Citigroup and he is one of the top Democratic policy advisers. The failure to recognize the housing bubble and the danger it posed was an act of extraordinary negligence that would get people fired in most lines of work. The fact that he still doesn't recognize the enormity of this oversight even after the fact (economists did recognize the housing bubble and the dangers its collapse would pose to the financial system) is remarkable. There were several reporters from major media outlets at this event. It would have been appropriate to note that Mr. Rubin is apparently still does not recognize that the collapse of the bubble and the resulting financial chaos was both predictable and predicted by economists who did understand the financial crisis that it would create.
--Dean Baker
