The Fed Was Flying Blind in 2006

There is something utterly engrossing about witnessing the spectacle of blithe ignorance in the face of impending doom.

So it is utterly engrossing, not to mention frightening, to read the January 2006 transcript of the Federal Reserve's eerily calm meeting at the dawn of the housing market's slow-motion meltdown. Consider some of the inauspicious details. Days after a sharp GDP decline, the Fed broadly considered the warning sign a statistical aberration. They characterized the housing crisis as a limited risk. Members praised Greenspan's tenure not only as unblemished, but also as a launching pad for years of steady growth. It's a grim scene, and it reminded me of another spookily casual transcript -- from the cockpit of doomed Air France flight 447.