This will appear on my Amazon review page shortly:
The Housing Boom & Bust by Thomas Sowell
The boom and bust in the US housing market has had enormous implications for the world economy as a whole so it is useful to have a grasp of what caused it, how we can avoid doing it again and how not to respond.
The bust is easy to explain- house prices rises vastly exceeded gains in income, population or productivity so could not be sustained. A bust was inevitable, explaining the boom is the tricky part.
Contrary to popular dogma the boom wasn't fueled by 'deregulation' or the free market but was brought into being by the government interventions- whether in restricting land use or coercing banks to drop lending standards.
I won't attempt to rehash the entire book but Sowell looks at the impact of all the main players- the banks, the federal government, Fannie & Freddie and the regulators and explains how they each interacted to cause this failure. Unsurprisingly politicians come out particularly badly.
The book probably was rushed out by the publishers soon after the crisis came to a head in late 2008 and early 2009, hence the awkward lack of numbered end notes (there is a chapter by chapter list of sources but it is much harder to cross reference). However the analysis doesn't really suffer because Sowell has been writing about aspects of the crisis for years before the actual crash.
ATW OPEN THREAD
1 hour ago