Tyler Cowen and Arnold Kling tag team Brad DeLong over the causes of the housing crisis. Tyler puts it well here:
It is not denied that the mortgage agencies were guaranteeing about half of all U.S. mortgages right before the crisis (Yet somehow they had not so much to do with the crisis?)
. . .
I will just say that the mortgage agencies made the crisis much, much worse . . . I don’t yet see that the counters to Wallison and Co. should budge me from this position.
It is increasingly strange that progressives refuse to acknowledge that government policy/subsidies might have at least some role in the crisis. After all, progressives are now starting to point out the role government policy/subsidies in the market for food played in the nation’s rising rates of obesity. Why should housing be so different? As always, Wallison’s dissent is well worth the time.
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