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View Diary: Mayor Bloomberg repeats right-wing lies about genesis of financial crisis (57 comments)

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  •  'Fannie and Freddie Started the Mess'? (0+ / 0-)

    Some of those comments are fairly insane, and I don't know what qualifications any of the authors have.  I would like to hear a rebuttal from another PHD economist in a debate against Paul Krugman but I try not to read newspaper comments, makes me feel like I'm lving on Mars.  Can you 'splain me how Fannie and Freddie Started the Mess?

    Because if you're looking for how it started, in my admittedly unqualified opinion, Fed monetary policy might be a better target.  Free money perpetrating unwise borrowing, which in turn resulted in price inflation.  The $150,000 house at 8% ended up being a $300,000 house at 4%, the only difference being the 30 years of debt servitude on twice the principal.  Add Wall Street 30x leveraging masquerading as 'financial innovation' to the mix and you've got a real bomb.

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