Why was Alan Greenspan such a patsy for George W?

Some interesting speculations from Brad Delong.

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16 years ago

This is interesting, too!

Pay attention to down under, Mate

(Nice to see they sometimes notice us!)

16 years ago

Adjustable Mortgages aren’t the big problem. Sub-prime is. And with sub-prime, Greenspan is as guilty as sin.

The Fed went along with a report in the late 90’s published by the Urban development authority that essentially supported the view banks were following discriminatory-lending practices by not setting up branches in poor neighborhoods and not lending money to people living there..

Uncle Al’s Fed went along with that forcing the Fed chartered banks to “clean up their act” forcing them to essentially lend to people who would turn out to be poor credit risk. That’s the genesis of sub prime lending in the US. I am not surprised Uncle Al hasnt raised that issue if he is doing mea culpas.

Bring Back CL's blog
Bring Back CL's blog
16 years ago

JC, this is the first time I have heard of banks being forced to loan to people who shouldn’t have had loans in the first place.

Everything I have read on thid topic has suggested Banks did it very willingly believing the secutisdation process would leave the poo somewhere else.