Trump's hiring Bear Stearns economist who promised the economy was fine right before it went...

[DonViejo]

Trump’s hiring the Bear Stearns economist who promised the economy was fine right before it went bankrupt

Famous last words: “Don’t panic about the credit market.”

Updated by Matthew Yglesias@[e-mail] 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. It’s 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 “Don’t 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.”

more
http://www.vox.com/2017/3/15/14596938/david-malpass-treasury

[gibraltar72]

1. Makes sense.