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Tyler says read it and weep.
the definitive work on how housing policy affected mortgage lending. Pinto has access to good data. He has the institutional knowledge. He doesn't have an address at Harvard, Princeton, or Chicago, but I find facts more convincing than credentials.There will be more conversation about this work, but there is an interesting idea that has emerged in comments so far: it is government that caused the mortgage crisis by forcing banks to give credit to unqualified borrowers, and many of them turned out to be deadbeats. This fact is evaded and obscured by partisan bickering which seeks to assign blame to one party or another when it is government - under one regime or another - that is the culprit.
The issue is less that the Democrats are more guilty than the Republicans, or the reverse, it is that government under either party has become too powerful and meddlesome for the good of society. It matters less which idiot is playing with fire than that there are idiots playing with fire.
From Chapter 1 "The Lesson" in Henry Hazlitt's "Economics in One Lesson" (new edition, 1962)
". . . the whole of economics can be reduced to a single lesson, and that lesson can be reduced to a single sentence -
The art of economics consists in looking not merely at the immediate but at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups."
"The bad economist sees only what immediately strikes the eye; the good economist also looks beyond."
"While certain public policies would in the long run benefit everybody, other policies would benefit one group only at the expense of all other groups. The group that would benefit by such policies, having such a direct interest in them, will argue for them plausibly and persistently. It will hire the best buyable minds to devote their whole time to presenting its case. And it will finally either convince the general public that its case is sound, or so befuddle it that clear thinking on the subject becomes next to impossible."
(providing that over the first morning coffee I transcribed the above correctly)
Posted by: Anon at August 21, 2010 05:30 AM