Financial crisis thesis

In the early and mid-2000s, the Bush administration called numerous times [62] for investigation into the safety and soundness of the GSEs and their swelling portfolio of subprime mortgages. On September 10, 2003, the House Financial Services Committee held a hearing at the urging of the administration to assess safety and soundness issues and to review a recent report by the Office of Federal Housing Enterprise Oversight (OFHEO) that had uncovered accounting discrepancies within the two entities. [63] The hearings never resulted in new legislation or formal investigation of Fannie Mae and Freddie Mac, as many of the committee members refused to accept the report and instead rebuked OFHEO for their attempt at regulation. [64] Some believe this was an early warning to the systemic risk that the growing market in subprime mortgages posed to the US financial system that went unheeded. [65]

Yes, increasingly aggregate demand would, in the short run, generate strongly growth--but because of America's increasing competitive weakness, a lot of the demand would result in a surge in imports. America began NOT investing in itself in the 1970s; we have a long history now of failing to investment in education, human capital, and infrastructure. And that failure has continued since 2008--and worsened. Our slow recovery is the product of long inattention to the demands of global competitiveness--and it will likely slow further. See Alden, Failure to Adjust.

Financial crisis thesis

financial crisis thesis


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