Tuesday, September 23, 2008

As Reagan Would Have It: Government is the Problem

Many monumental errors and misjudgments contributed to the acute financial turmoil in which we now find ourselves.

Nevertheless, the vast accumulation of toxic mortgage debt that poisoned the global financial system was driven by the aggressive buying of subprime and Alt-A mortgages, and mortgage-backed securities, by Fannie Mae and Freddie Mac.

The poor choices of these two government-sponsored enterprises (GSEs) -- and their sponsors in Washington -- are largely to blame for our current mess.

--- That is from an excellent oped by professor Charles Calomiris at the Columbia Business School and his coauthor in WSJ, more here.

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