Mark Thoma on the GSEs and the Zero Bound and Other Links

I’m not sure the Fannie/CRA debate is even worth having, but if people insist, there’s a simple observation and a challenge they should consider. The observation is that banking is a highly political activity at all times: which loans are given to whom is a function of the overall political climate (or micro-climate), not simply black letter law. [Of course, to an even greater extent, it’s a function of social mood, which is why any debate which seeks to identify a primary cause is futile.] The challenge is to confirm or falsify one’s hypotheses based on something quantifiable. Fannie and Freddie are going to cost the taxpayer big: how big before Mark Thoma says they were a big problem? What about some detailed analysis of which loans went bad and where: anyone eager to cry ‘racist’ should be eager to see relevant cross-tabs of the data. Any real debate requires more data and less appeal to authority in the form of Paul Krugman and the Federal Reserve.