Poking holes in Bernanke’s housing approach

While Ben Bernanke, chairman of the Federal Reserve, has repeatedly contended that low interest rates — a hallmark of the Bernanke-Greenspan days of the early 2000s — had little to do with the housing crisis, Wall Street Journal economics editor David Wessel argues that the Bernanke defense is somewhat flimsy. In this video, Wessel enumerates the problems with the argument and the reasons that some Bernanke critics are calling foul. “A number of cogent critics of Bernanke say that by keeping rates so low for so long… they encouraged Wall Street to create all sorts of ersatz safe investments to meet the demand from overseas,” Wessel said. “And that demand led to more and more lousy mortgages being made.”