Precise sources on how government helped create the bubble?

Economics Economics Questions
1

Hi everyone,

I got in a fight the other day with a student of economics. I tried to argue that if it wasn’t for governmental interventions the reckless lending standards before 2008 would never have taken place. He, of course, mainly blamed the good old “greed” and claimed that they were no moral hazards and no governmental guarantees on mortgages before 2008 and that the balance sheet of the FED was too tiny compared to the economy as a whole to effectively inflate the housing bubble.

He eventually asked me to precisely cite the governmental actions or bills that helped create that housing bubble. I could really come up with something that was precise enough to convinced him.

Can anyone help me out?

Thanks a lot!

2

http://mises.org/daily/3165

3

This is an overview.

Don’t Blame the Market

More in depth:

Lost Trust- The Real Cause of the Financial Meltdown- Independent Institute

The House that Uncle Sam Built- FEE

The Perfect Storm of Ignorance- CATO

Did Deregulation Cause the Financial Crisis?- CATO

Others:

The Trillion-Dollar Bank Shakedown That Bodes Ill for Cities CRA- 2000

How HUD Mortgage Policy Fed The Crisis – History on HUD

Fannie Mae Eases Credit To Aid Mortgage Lending- NYT- 1999

Assault on the mortgage lenders: in the name of racial justice, the Clintonites… (Original source taken down)

Two Fed economists wrote a paper in 2005 claiming that there was no housing bubble

Hope this helps get you started.

4

Community Reinvestment Act with regulatory changes in 1994-1995.

5

If he’s the type that runs for cover when confronted with academic sources countering his position, you might throw him this:

“According to your view, greed led to the breakdown. What forces/factors caused a sudden explosion of greed in 2006?”