"The right argues that the cause of the crisis was that the government made banks (Fannie and Freddie and CRA) buy bad loans. The left argues the government through deregulation let investment banks run amok. Each is partially correct. My explanation is a little more complicated but it is also simpler in that it explains the behavior of the investment banks and Fannie and Freddie:past bailouts of large creditors increased the expectation of future bailouts. That in turn let all financial institutions borrow from large creditors at reduced rates and in enormous amounts relative to using their own money." Russ Roberts
In other words: Fannie, Freddie and Wall Street were, per yesterday's blog, walking tightropes connecting skyscrapers sensing a government safety net just a few feet below...
"The worst tempered people I have ever met were those who knew that they were wrong." David Letterman
Such are the red-faced, forehead-veins-bulging, analysts/economists while defending their forecasts on CNBC and Bloomberg...
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