Explaining the current financial mess

Confused by all the posturing by Republican and Democratic politicians regarding the current financial problems? Well, that is no surprise is it? Politicians typically know little-to-nothing about economics, rarely grasp how incentives drive human behavior, and usually don’t pay attention to the consequences, intended or otherwise, of their actions.
To assist in peeling away the confusion, this post offers a series of links. No attempt has been made to confirm whether all arguments are valid, let alone logically compatible with each other. They are offered in the spirit of putting more information out there so we can begin to improve all citizens’ knowledge about the situation in a way that leads to a more informed public debate about the financial problems and whether the bailout addresses them.
Building on Andrew’s recent post, here you go:
The Financial Crisis: What Went Wrong?
Who caused “the biggest financial crisis since the Great Depression?”
A Memo Found in the Street: Uncle Sam the Enabler
Blame Fannie Mae and Congress For the Credit Mess
How the Democrats Created the Financial Crisis
A mortgage fable
Kling on Freddie and Fannie and the Recent History of the U.S. Housing Market
The Long Road to Slack Lending Standards
Shiller and fundamentals
High Anxiety: We went from playing inflation-era Monopoly to playing depression-era Monopoly in mid-game
Neither Fish Nor Fowl: An Overview of the Big-Three Government-Sponsored Enterprises in the U.S. Housing Finance Markets
Hindsight regulation
How close was the financial system to melting down?
Bear Stearns, the CRA, and Freddie Mac
No money down, revisited
Stubborn ignorance
It’s not the CRA
The role of the CRA
The Real Culprits In This Meltdown
Deregulation Not to Blame for Financial Woes
Because it wasn’t a complete deregulation at all
Did the Gramm-Leach-Bliley Act cause the housing bubble?
Bill v. Barack on Banks: Clinton instructs Obama on finance and Phil Gramm
Various on Instapundit
Principled Libertarians Put Their Money Where Their Mouths Are
Bankruptcy, not bailout, is the right answer
Frank’s fingerprints are all over the financial fiasco
Party like it’s 1999 redux: The New York Times predicted Fannie Mae failure
Why We’re Floundering: And a better way forward
A Simpler Solution
S.E.C. Concedes Oversight Flaws Fueled Collapse
The Conservative Case for Unlimited Deposit Insurance
Why the Bailout is Bad for America
The Paulson Sale
Bailout Politics
Congressman Mike Pence
New Capitalism: Market capitalism in the United States will never be the same
Before D.C. Gets Our Money, It Owes Us Some Answers
Pop! Welcome to the ‘Mentos Economy’ – Like Mentos in Soda, Today’s Economy Is Full of Bubbles
The Bailout

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Anchor Rising
12 years ago

Defining government’s role in the current financial mess

In addition to the links found here, Russell Roberts of Cafe Hayek offers one of the clearest explanations of the current financial mess in How Government Stoked the Mania: Housing prices would never have risen so high without multiple Washington…

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