Paul Krugman has now completely abandoned logic and honesty in his pursuit of supporting the oligarchy and shilling for a Clinton presidency. In a blog post today he asks, “were big banks really at the heart of the financial crisis, and would breaking them up protect us from future crises?” and answers his own question with a dishonest and a historically revisionist “no.”
“Predatory lending,” he goes on to say, “was largely carried out by smaller, non-Wall Street institutions like Countrywide Financial; the crisis itself was centered not on big banks but on ‘shadow banks’ like Lehman Brothers that weren’t necessarily that big.”
Bank of America was a huge player in the predatory lending game. It was certainly not small at the time, and it definitely could not be considered a “non-Wall Street institution,” so Krugman’s first defense of “big banks” is bullshit. Besides which, predatory lending was not the proximate cause of the crash, it only laid the groundwork.
The crash itself was caused by trading in financial instruments based on those faulty mortgages. It was that which took down Lehman Brothers, which was the fourth largest investment house in the United States at the time that it failed, so it’s pretty hard to agree with Krugman’s dishonest claim that it “wasn’t necessarily that big.”
Not to mention that it was the failure of Lehman which revealed that all of the other investment banks, including the three larger than Lehman, were as rotten and buried in bad investments as was Lehman and being "too big to fail" had to be bailed out.
Krugman’s claim that “going on about big banks is pretty much all Mr. Sanders has done” is utter bullshit, as his claim that an “absence of substance beyond the slogans seems to be true of his positions across the board.” Krugman is not ignorant of the truth regarding the campaign of Bernie Sanders, he is lying in an attempt to bolster Clinton’s presidential aspirations.