To solve a vexing problem. To seize a promising opportunity. To find the best path forward. For centuries, for millennia, we’ve sought the power of prescience. These days, policy analysis—well and thoughtfully done—is among the most powerful tools we have to magnify our foresight.
As early as the year 2000, while he served as Governor of the Federal Reserve, Ned Gramlich, former dean of the Ford School, began to sound the alarm regarding the subprime mortgage market. It would be seven years before the crisis would come to a head, but Gramlich urged greater oversight of loan products that, while making home ownership more broadly accessible, were also placing some of society’s most vulnerable borrowers at risk.
Although at this early stage it may have been difficult to foresee just how large a risk this issue would eventually pose, Gramlich doggedly pursued it. By 2007, when the Urban Institute published his book, Subprime Mortgages: America’s Latest Boom and Bust, the problem had achieved the dimensions of a full-blown crisis and Gramlich’s work was a key instrument for all who were trying to figure out what went wrong and mitigate the damage.
“To say that he was prescient is an understatement,” said Eric Belsky, director of the Federal Reserve’s Division of Consumer and Community Affairs, during a conference this summer. Not only was Gramlich early to point out the problem, he was also at the forefront of proposing strategies to deal with it, outlining a multipronged approach that included stronger standards around mortgagebacked securities, greater selfpolicing by lenders, expansion of community-based organizations, and a concerted effort to avert foreclosures, among others.
From the vantage point of 2014, these changes are pretty much what happened, said Belsky. All of Gramlich’s recommendations have been implemented, at least in their broad contours, but even though Gramlich had written it all down, he wouldn’t have taken credit for the foresight, Belsky thinks.
Subprime lending is just one of the many policy areas Gramlich illuminated during a long and prolific career in research and public policy. Others included fiscal policy, consumer protection, housing, community development, poverty, income distribution, baseball compensation, and more.
To celebrate the breadth and depth of Gramlich’s legacy, the Ford School and Federal Reserve Board convened a conference in Washington, DC this summer: “Honoring Ned Gramlich and the Importance of Policy Research.” Among those present were the current and three former directors of the Congressional Budget Office and panelists and moderators from a dozen organizations including the Urban Institute, the Brookings Institution, the Federal Reserve Board, and the Council of Economic Advisers.
Many shared personal anecdotes about Ned Gramlich’s thoughtfulness, humor, approachability and inclusiveness. But the thread that ran through all the panels recalled Gramlich’s passion for applying economic methods to conduct sound policy analysis, and his drive to do it well and honestly.
By Miriam Wasserman
Want a free commemorative poster from the Gramlich conference? Just contact Erin Flores.
Below is a formatted version of this article from State & Hill, the magazine of the Ford School. View the entire Fall 2014 State & Hill here.