...that there was increasing pressure from the Right for de-regulation even before Reagan was elected. I wouldn't be at all surprised to discover that Carter helped pass deregulation of the S&Ls simply to take away one club that would be used to beat him in the upcoming election.

That does not let the Democratic Party off the hook, but it does suggest that idiocy from the Right was the prime mover in releasing the banksters to screw us all.

Carter would likely have been more alert to regulatory rules that remained had he been re-elected. That's one aspect of all this that's always bugged me. Even WITH de-regulation, the Executive Branch still had ways to limit the damage, but under Reagan, and Bush II the Executive simply stopped regulating all together. And that is the primary sin.

The legislation cited simply allowed interest rates to rise. This was done to get credit and saving moving in a time of stagflation.

What was happening back then was that inflation reached a point where it outpaced interest rates, so it made no sense to put your money in the bank, since it would be worth less even with interest. And it made enormous sense to borrow, because you'd pay the loan back with inflated dollars.

Reagan & Co. were elected in large part on the promise to "get the government off your back" which meant across-the-board deregulation. Some of that was good - a lot of it was bad.

As a theorist and modeler os international trade, he is every bit the genius his Nobel suggests.

As a political analyst, he is a pitiful partisan hack.

The fact that he is highly intelligent and has credibility only makes his asinine and highly partisan rubbish in the NYT worse, as it is more likely to belived by the unsophisticated since it is "expert" testimony.

I really have nothing to add to the second letter posted here. Bank savings accounts were being robbed by inflation and there was a crying need for banks to give out a higher rate of return.

It was done. It was a mistake. Fix it.

Why is it that your title, lede, and summary blurb make no reference whatever to your final conclusion.

Greider is great and always a fun read, especially on the nexus of economic history and policy, ideology, and political machinations. But he doesn't have the pure, technical economic gravitas of Krugman, and he will defend the thesis of his latest book, won't he. Not to mention that his current analysis might have caused a certain dissonance with his previous political affiliation. Perhaps he is not the best choice to fill in the blank for the old reliable "even the highly qualified liberal economist(fill in the name) disagrees with Paul Krugman's erroneous, vicious, nakedly partisan attack on Reagan."

Don't forget, even the liberal Jeff Rosen says that Sonya Sotomayor is a contentious, irascible, lightweight bubblehead.

THe S&L's were obligated to pay the going rate on interest on CD's, but there was no one on the other side of the transaction willing to borrow at those rates. Reagan also formed the President's Working Group on the Financial Markets, and sent Bush I to the floor of the NYSE to pledge government money to the stock market during the 87' crash. The plundered S&L's became a conduit for Iran Contra, Neil Bush was involved in Silverado, and was probably involved in his funding his fathers clandestine war. Krugman was not a critic of the President's economic policy, he chose instead to focus his attention on his handling of the Iraq war. If we could have stopped the Iraq war even one year sooner, the financial crisis might have been avoided.

Carter did not have the support of Congressional Democrats, especially Ted Kennedy. Then, as now, the blame belongs in the people's house.

So now instead of letting the free market reap what it has sowed and teaching investors/manipulators of every ilk the true meaning of caveat emptor we will instead empty the public trust to bail everyone out.

Please explain how this makes sense as an appropriate government response:

"We gave you all the freedom that you asked for, you abused it and created your demise, but now we will step in and rescue you with the money and future of the innocent."

HTWW Did It

Your comment that when someone from the left, and someone from the right criticize you, they may have a point is interesting, but meaningless. Glenn Greenwald has frequently debunked that line when it's used as an excuse for poor journalism, and it's equally bad when used as an excuse for poor economics.

What you actually have is a conservative economist who has been a long term enemy/opponent of Krugman's, and a center-left (certainly right of Krugman) journalist who's economic reporting has long been heavily criticized by Krugman. So two ideological opponents of Krugman have critical things to say about Krugman. I don't think this merited your headline.

while I appreciate this review of the history of banking regulation, trying to identify who broke the banking system is kinda silly because it assumes that at one point the banking system actually worked.

Bank crises are a staple of history, and when we don't have crises we just have stagnation.

The problem here is the mistaken belief that some one thing did all this. That is not how the world usually works. Just as "Ask the Pilot" points out, most aircraft accidents are not the result of single point failures but rather result from a nexus of events, so it is also so in the economic world. If you pull enough bricks from the bottom of a brick wall, the whole wall will collapse. That's what has happened here. All three gentlemen identify bricks that were pulled from the foundation. There are probably more.

So while we all agree that both sides of the aisle were responsible for the current state of our economic mess, Reagans firing of the Air Traffic Controllers was a definite nod to the BIG BUSINESS community that it was ok to start the WAR on the American Workers especially the UNION!

The Corporate Oligarchy has controlled the government ever since! In order to really equal the playing field for everyone else "WE THE PEOPLE" must demand that our government be returned to us! We must demand that legislation in the form of rules and regulations be put back in place! No longer should the Corporation be the determining factor in how America is run! The same reason that rules & regs were put in place after the last Depression is the very reason that they need to be returned, even more so now, because these Corporate Goons don't even believe that they are doing anything wrong!!!