bobbyw24
12-25-2011, 01:33 PM
The leading Republican candidates for president have embraced an explanation of the financial crisis that has been rejected by the chairman of the Federal Reserve, many economists and even three of the four Republicans on the government commission that investigated the meltdown.
Both former House Speaker Newt Gingrich and former Massachusetts Governor Mitt Romney lay much of the blame on U.S. government housing policies, saying they led to the real estate crash that almost brought down the banking system and has cost homeowners $6.6 trillion since 2006.
Unregulated private lenders who sought profits in risky subprime loans were bigger contributors to the crash than federal housing policy, critics of the Republican argument say. They also point to simultaneous housing bubbles in other countries beyond the reach of U.S laws and surges in the value of non-housing investments such as corporate bonds.
“It’s just completely wrong,” said Joseph Gagnon, a former Fed economist who’s now a fellow at the Peterson Institute for International Economics in Washington.
http://www.bloomberg.com/news/2011-12-21/romney-gingrich-bid-to-pin-crisis-on-government-ignores-culprits.html
Both former House Speaker Newt Gingrich and former Massachusetts Governor Mitt Romney lay much of the blame on U.S. government housing policies, saying they led to the real estate crash that almost brought down the banking system and has cost homeowners $6.6 trillion since 2006.
Unregulated private lenders who sought profits in risky subprime loans were bigger contributors to the crash than federal housing policy, critics of the Republican argument say. They also point to simultaneous housing bubbles in other countries beyond the reach of U.S laws and surges in the value of non-housing investments such as corporate bonds.
“It’s just completely wrong,” said Joseph Gagnon, a former Fed economist who’s now a fellow at the Peterson Institute for International Economics in Washington.
http://www.bloomberg.com/news/2011-12-21/romney-gingrich-bid-to-pin-crisis-on-government-ignores-culprits.html