Saturday, November 12, 2011

Why GSE's Did Not Cause The Financial Crisis

This article helps to debunk one of the common explanations of the financial crisis that I hear from my acquaintances. The article makes many good points but I like the one that shows what conservative think tanks were claiming prior to the crisis. They were arguing that the GSE's were not providing enough mortgages to low income applicants. The reason for their position is not provided in this article but conservatives wanted to open up the securitization market for Wall Street. They argued that private banks would be more efficient. They had to change their tune post crisis in order to be consistent with their position that private industry is more efficient than public providers of services.

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