How Did Paul Krugman Get It So Wrong? (Nobel Laureate Missed the Fannie and Freddie Debacle)
In July 2008 Nobel laureate Paul Krugman wrote that Fannie Mae and Freddie Mac (the GSEs) "didn't do any subprime lending, because they can't: the definition of a subprime loan is precisely a loan that doesn't meet the requirement, imposed by law, that Fannie and Freddie buy only mortgages issued to borrowers who made substantial down payments and carefully documented their income." (New York Times, July 18, 2008) Earlier this month he compounded his error when he stated: "Zombies, zombies, everywhere. One of the enduring myths of the financial crisis has been the claim that it was the result of...
Original Article: Forum: News/Activism
Tags: Borrowers, Debacle, Fannie Mae, Fannie Mae And Freddie Mac, Financial Crisis, Freddie Mac, Gses, Mortgages, Myths, New York Times, Nobel Laureate, Paul Krugman, Subprime Lending, Subprime Loan, X22, X27, Zombies