Did Credit Market Policies Cause the Housing Bubble?

An interesting discussion of the causes of the excessive residential price appreciation during the boom years.

GlaeserGFCPaper2010

Source: Did Credit Market Policies Cause the Housing Bubble?
May 2010
By Edward L. Glaeser (Harvard University) , Joshua Gottlieb (Harvard University), and Joseph Gyourko (Wharton
School, University of Pennsylvania)

And The

Rappaport Institute for Greater Boston

and

Taubman Center for State and Local Government

About My Blog

Hi and welcome to The Profit Motive, I’m your host Caleb Lawrence. Once upon a time in America the media acted as the watchdog of the corporations and the state. In the modern era it’s all about ratings and profits, opinion has been substituted for news and frequently is presented as fact.
In addition to this Blog you can follow me on my daily radio show KPIG 107.5 FM in Santa Cruz California and KPYG FM 94.9 Cayucos/San Luis Obispo California. A thousand Blogs were able to spot the current problems and many began discussing it years before it reached crises proportions. While there were exceptions, and these exceptions are becoming more common, the mainstream media failed to get it and largely continue to do so.

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Food For Thought

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“If we understand the mechanism and motives of the group mind, it is now possible to control and regiment the masses according to our will without them knowing it.” – Edward Bernays

"There are two ways to conquer and enslave a nation. One is by the sword, the other is by debt."
John Quincy Adams
1735-1829

"Speaking the truth in times of universal deceit is a revolutionary act" - George Orwell

-In economics, the majority is always wrong.
John Kenneth Galbraith

“It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so.” – Mark Twain

"The last duty of a central banker is to tell the public the truth."
Former Fed Governor Alan Blinder 1994

Ben Bernanke back on October 31, 2007 (when the housing and subprime crisis were going to be “contained” — remember that one?):
“It is not the responsibility of the Federal Reserve - nor would it be appropriate — to protect lenders and investors from the consequences of their financial decisions.”

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