On 2011-06-13 2:57 PM, Nico Williams wrote:
I don't think it's fair to blame private financial institutions for the ill-effects of an ill-advised government plan to subsidize housing ownership by individuals. Without Frannie, CRA, or anything of the sort I don't think we'd have seen the degree of financialization of housing that we saw, meaning that we wouldn't have seen the home mortgage credit growth that drove the housing bubble, thus neither the bubble nor the crash. (Well, bubbles can happen without the help of the government, so let's say that the likelihood of such an immense bubble would have been pretty low without Frannie and CRA).
All the bad things the private sector did, it also did with commercial real estate. But the commercial real estate bubble did not cause a massive crisis. A lot of commercial real estate loans went bad. Financiers ate them. That was that.
The difference was Fannie, Freddie, and the CRA. _______________________________________________ cryptography mailing list cryptography@randombit.net http://lists.randombit.net/mailman/listinfo/cryptography
