Refuting the RWNJ meme about the housing crisis AGAIN !!!
Stanford Economics Professor and monetary policy guru John Taylor in his timely book, Getting Off Track. Taylor begins:
The classic explanation of financial crises, going back hundreds of years, is that they are caused by excesses — frequently monetary excesses — that lead to a boom and an inevitable bust. In the recent crisis we had a housing boom and bust, which in turn led to financial turmoil in the United States and other countries. I begin by showing that monetary excesses were the main cause of the boom and the resulting bust.
What ?? No fan or fred ??
Surely RWNJ can't accept this
Hawcreek has it exactly. Anyone that uderstands banking knows that banks do not make very risky investments. Bankers get criticized for being too conservative making folks that need a home loan put up all kinds of collateral to get a loan. Fannie and Freddie, the playground of democrats, removed that risk.
Economics Professor Lawrence H. White now of George Mason University elaborates:
In the recession of 2001, the Federal Reserve System…began aggressively expanding the U.S. money supply. Year-over-year growth in the M-2 monetary aggregate rose briefly above 10 percent, and remained above 8 percent entering the second half of 2003. The expansion was accompanied by the Fed repeatedly lowering its target for the federal funds (interbank short term) i