Peter Wallison has an analysis of the
causes of the financial crisis, with an emphasis on government policies. (
Via David Frum.) As I found in working on an upcoming article for
Research magazine, Wallison also was quite prescient in warning there would be a crisis. Here's a
New York Times piece
from 1999 on government-sponsored enterprises embracing subprime:
In moving, even tentatively, into this new area of lending, Fannie Mae is taking on significantly more risk, which may not pose any difficulties during flush economic times. But the government-subsidized corporation may run into trouble in an economic downturn, prompting a government rescue similar to that of the savings and loan industry in the 1980's.
''From the perspective of many people, including me, this is another thrift industry growing up around us,'' said Peter Wallison a resident fellow at the American Enterprise Institute. ''If they fail, the government will have to step up and bail them out the way it stepped up and bailed out the thrift industry.''
