I think you should contact Thomas Sowell. I’m sure he would be horrified to learn that he published a book that is providing misinformation to the public.
Maybe you can educate him and show him the error of his thinking? Maybe offer to edit his book and remove the mistakes?
“Maybe you can educate him and show him the error of his thinking? “
I wouldn’t have to, there’s already an abundance of writing on the bubble by people who were in the industry. Chain of Blame, Fool’s Gold, ECONned, these are a few worthwhile books illuminating the crisis. There are many more. And there’s valuable articles like the Wired piece on David X Li’s Gaussian Copula function.
Sowell errs by falling for the CRA bogeyman. The CRA cannot explain the billions of dollars plowed into the subprime mortgage market by the shadow banking system and investment banks. The CRA didn’t cover them, they were non-depository firms. The CRA also cannot explain the bubble’s international character. This wasn’t simply an American phenomenon. And if every CRA loan ever made had failed you couldn’t have generated a collapse like 2008, there simply weren’t enough of them. Moreover studies by the Fed and investment houses like Lazard have identified the failure rate for CRA loans at around 6%, whereas private market subprime loans failed at triple that rate. This is easily acquired information.
Sowell isn’t the first to blunder when writing outside his field, and the peculiarities and history of mortgage funding isn’t his field. It’s a shame to see him misleading novices like you.