Actually Fannie And Freddie Did Not Cause The Housing Bubble

Paul Krugman


Over at The Big Picture, David Min has a terrific takedown of the claim that Fannie and Freddie caused the housing bubble. Every time you hear or read someone claiming that Fannie and Freddie were responsible for large amounts of subprime/risky lending, you should remember that this is based on essentially phony numbers: people at AEI invented their own definition of subprime, which isn’t the standard definition, and, more important, doesn’t work: the supposedly high-risk loans that F&F were making or buying were, demonstrably, not actually high-risk.Read the rest of this article at The New York Times.

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