One of 300 million Americans. Just another victim of the federal bailout (and, now, maybe AIG’s lawyers). He’s just like you, and he speaks for all of us.

But not really.  Goolsbee is in fact an influential, well-heeled academic who served as Chairman of the Council of Economic Advisers under President Barack Obama.

Goolsbee is right to be outraged that AIG is considering suing the federal government over the terms of its bailout. Of course, AIG’s problems were the direct result of a massive bubble in the U.S. housing market. Ironically, one of the most outspoken supporters of the easy-lending policies that led to that bubble was … wait for it …  Austan Goolsbee! Here he is 2007, at the peak of the bubble, arguing in the New York Times against any effort to tighten up federal oversight:

Almost every new form of mortgage lending — from adjustable-rate mortgages to home equity lines of credit to no-money-down mortgages — has tended to expand the pool of people who qualify but has also been greeted by a large number of people saying that it harms consumers and will fool people into thinking they can afford homes that they cannot.

Congress is contemplating a serious tightening of regulations to make the new forms of lending more difficult. New research from some of the leading housing economists in the country, however, examines the long history of mortgage market innovations and suggests that regulators should be mindful of the potential downside in tightening too much.

[D]o not forget that the vast majority of even subprime borrowers have been making their payments. Indeed, fewer than 15 percent of borrowers in this most risky group have even been delinquent on a payment, much less defaulted.

We’re not saying Goolsbee deserves blame for the AIG bailout. We know who signed off on that monstrosity, and it wasn’t a Democrat.

If we are going to get up on our moral high horses about AIG, though, can we at least ask why subprime apologists like Goolsbee never get any blame for defending risky lending?


  • Steve_J

    Perhaps the politicians will learn there is not such thing as “to big to fail”. Oh, what am I saying, politicians never learn a thing they just keep repeating the same failed policies over and over.

    • EastValleyConservative

      No, they won’t. What Droolsbee is doing is ensuring that the anger continues to be directed anywhere but at this administration. AIG no doubt, are complete idiots and fools over this—but again, Droolsbee doesn’t want the real conversation to happen about how we got there and how it continued ten-fold under Obama after it was handed to him as a gift wrapped precedent at the end of a much hated Republican (ha!) president’s term. He’s just dangling some silver for the loyal bots and ringing a bell so they will duly salivate. (his specialty–hence the name Droolsbee)

    • TomJB

      You know what else was “too big to fail”? Alexander Greece, Mongolia under the Khans, Rome, the Aztec empire, the USSR. Yes we can… fail too

  • stuckinIL4now

    It’s just another instance of the “convenience” that he was for it before he was against it. He was for it when it was self-beneficial to be for it before he was against it when it was self-beneficial to be against it.

  • Slapweasel

    More Government, Please!

    “Compassionate Conservatism” helped this bubble build and “W” gets splashed with the $#!* balloon, as well. He helped build that.

    Failures should fail. Government intervention before leads to taxpayer bailouts after.

    There should be only TWO people speaking for the Republican party right now. Marco Rubio and Rand Paul. (There are others, but they are the best.)

    • walterc

      And now you can add Ted Cruz.

      • Slapweasel

        I like Mr. Cruz. I need to see more of him and make sure he’s battle-tested. That’s on me, though.

    • TomJB

      Yep! Government bailouts over 30 years ensured we did not have the normal cycle of expansion and recession. Those little recessions would shake out the businesses with bad business models that could only survive in the good times. Bailouts for airlines, etc, ensured that eventually the bubble would pop and all those businesses that would have failed over a period of decades all failed at once.

  • PennyRobinsonFanClub

    Were his parents that retarded that they didn’t know how tho spell “Austin”?

  • TugboatPhil

    Hey, Austan! 300 million of us did NOT bail them out. It’s more like 145 million and we’re also bailing out the losers you buy votes from.

  • Jillane Kent

    Yet these liberals are celebrating the gross loss of taxpayer monies when they crow that Obama “saved” GM…

  • Dave Silva

    well heeled academic translates to total imbecilic buffoon who has never held a real job.

  • beebop1952

    Was this a pre-emptive distraction to ward off attention on the new Treasury Secretary’s $950,000 Citibank Bonus? These guys are such a RIOT.