August 06, 2011
The NYT did a pseudo-retrospective on Jean-Claude Trichet as he approaches the end of his 8-year tenture as head of the European Central Bank. Remarkably, the piece never once mentions the fact that he allowed housing bubbles to grow unchecked in Spain, Ireland and elsewhere in the euro zone. These bubbles created huge imbalances that could not be easily corrected, as we are seeing now.
It was 100 percent predictable that these bubbles would burst and lead to a severe downturn. It is hard to imagine a more serious mistake by a central bank president. This is like a school bus driver coming to the job drunk, driving into oncoming traffic, and getting all the students killed.
It would have been worth mentioning a mistake of such magnitude in this article.
Comments