So They Were Fools, Not Liars

Washinton Post reveals that internal documents shows that Fed officials in 2006 believed that there was a housing bubble, and that even if it was, they would be able to contain it.

The Fed official were wrong, but that is hardly news. After all, both their actions and public statements at the time showed that they believed that there was no housing bubble. It would have been more shocking if the documents had showed that they lied and deliberately failed to take action than for the documents (as they do) to show that they were as clueless as their public statements and actions suggested.