I am not going to lie to you: When I saw that Brad Delong, by any account an ‘A’ list blogger and one of my daily reads, defended Megan McArdle right after (or maybe even before) I attacked her, well I wasn’t too happy. This is still my first year blogging, and I am well aware that I have a lot to learn.
So I wrote another post to try and re-focus on the key issue in this particular dust-up, which is that some in our national discourse very much want to focus the blame for the sub-prime meltdown on a bunch of ‘greedy people’, or some variation thereof.
I am not going to go into detail about why that analysis is wrong at this time; sooner or later I will write a post about behavioral engineering.
For now, my purpose is a simple one: Vindication!
I agree: that Edmund Andrews acted somewhat like a moonstruck idiot is not especially interesting–save perhaps in the hands of F. Scott Fitzgerald. That American Home Mortgage and company were willing to finance his acting like an idiot and so drag themselves down as well is somewhat more interesting.
The feelings and motivations of the borrowers is of no consequence in this analysis. The fact that banks were making these bargains, on the other hand, is very much a first-order issue.