Dean Baker | The Federal Reserve Board, Jobs and the Rewriting of Economic History

As most people know, economists are good at rewriting history. We have seen this in the last few years as the collapse of the housing bubble and the ensuing downturn has been turned into one of those unavoidable tragedies that could not have been prevented. After all, no one could have imagined that house prices wouldn't keep going up forever or that anything bad might happen if prices actually fell.

In reality it was possible, and in fact easy, for those who pay attention to data to know that house prices would fall and that the consequences for the economy would be very bad. But most discussions of the crisis treat it as a natural disaster like Hurricane Katrina, and absolve the economists in policy positions from any responsibility.