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Government's Role

Here is my piece in the WSJ on government’s role in the mess. It’s a work in progress. I am working on getting more data to see if the case is sturdy or just suggestive. And of course this is an ex post narrative. I tried to be careful to say that it is part of the story and perhaps the essential part. The people who are saying it ISN’T Fannie and Freddie, or it isn’t the CRA or it isn’t the Taxpayer Relief Act of 1997 or Greenspan’s role in cutting interest rates are probably right. No one of these is THE cause. But I think the combined effects are potentially as compelling once I dig up all the numbers. And I certainly prefer the combined effects to the one cause explanation of greed or markets failed.

For the other side, here’s another account by Joseph Stiglitz.

In the meanwhile, I hope to continue posting data as I accumulate it on this issue.