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Friday, February 19, 2010

The Bank Crisis: A Perfect Storm of Ignorance

Jeffrey Friedman:
"You are familiar by now with the role of the Federal Reserve in stimulating the housing boom; the role of Fannie Mae and Freddie Mac in encouraging low-equity mortgages; and the role of the Community Reinvestment Act in mandating loans to "subprime" borrowers, meaning those who were poor credit risks. So you may think that the government caused the financial crisis. But you don't know the half of it. And neither does the government."
I don't know enough to know how to judge Mr. Friedman's analysis. But it seemed to make a lot of sense to me. (HT: Instapundit)

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