For months Alex Tabarrok has being doing a great job yelling to all the world that this “credit crunch” is bogus. What’s hilarious is that even his critics--see this post by Mark Thoma--rely on evidence that actually proves Alex’s case. I summarize the relevant findings in this blog post. An excerpt:
During the dark days of the credit crunch, when we were warned the entire financial system would collapse if we didn’t cough up $700 billion, the supply of “industrial and commercial loans at all commercial banks” was at an all-time high, and in fact its year/year rate of growth at its lowest point was “only” 12% or so. If you exclude the last few years--which everyone agrees was an insane period with perhaps criminally lax lending standards--then the year/year rate of growth in these loans was higher than at any point going back to the early 1980s. Really, this is amazing, given all the fear-mongering we’ve been hearing.
