Interesting piece from the Austrians suggesting that the Community Reinvestment Act did not cause the housing crash. But Fannie and Freddy were deeply implicated. And the Fed.
Dwight Jaffee of the Berkeley Business School testified in front of a Congressional Commission on the crisis… Those remarks are one of the best overviews of the role of housing policy and the various agencies that I’ve read since the recession began. I recommend it highly. He puts the blame squarely on Fannie and Freddie and the way in which they combined private profits with a public mission and an implicit government guarantee.
So folks, it’s time to stop blaming the crisis on the CRA and get the attention back where it belongs: expansionary monetary policy combined with GSEs with a government guarantee.