Relevant:
- George Will Spreads Some Lies About the Economic Crisis
- Housing Crisis Was Created by a Perfect Storm of Greed and Goals
- Ben Bernanke Won’t Take the Blame for Bubbles
- Global housing bubbles unite: How easy debt has created the first ever worldwide housing boom and bust. The busted, the leveled, and the booming.
- Federal Reserve bubble escape clause: The master of bubble creation talks about preventing future bubbles and other circular banking logic. Fed aggressively buying securities outright.
2012-09-13 — econlib.org
``Did we see liquidity pushed into the housing market? Of course we did. Not just the Federal Reserve's low rates in the mid-2000s (lower than the Taylor Rule recommended); we also saw the massive entry by Fannie and Freddie into the fringes of subprime, the most dangerous portion of the market.
The private sector created the housing bubble in the same sense that college students created bubbles in Smith's experiments: They voluntarily made the trades but Fannie, Freddie, and the Fed created a liquid, bubble-prone environment. ''
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