I did learn something. I read the books by Sperry and Sowell. You should too. The simple fact was too much money was lent to people who couldn’t pay it back. Banks were forced by the government to do so. The result was predictable.
You read two books by people not involved in the financial world and who were not warning of the impending problem as it developed.
Sowell is an economist and not someone involved in finance. Moreover he is 80 years old and obviously relied on researchers who didn’t bother to immerse themselves in the details of the mortgage world. The CRA plays a large role in his book but the majority of the subprime lending and innovation was done by the shadow banking system that was completely free of CRA regulation.
There are books and hundreds of articles on the mortgage debacle by people who are in the financial field and who were warning of the problem as it developed. Gillian Tett, Muolo and Padilla, Yves Smith wrote on the impending disaster as it was developing.
“The simple fact was too much money was lent to people who couldn’t pay it back. Banks were forced by the government to do so. The result was predictable.”
Tell me what law or regulation you think forced “banks” to lend money to people who couldn’t pay it back. And by “banks” do you mean retail banks, investment banks, pure mortgage lenders, or everyone who made mortgage loans?
By regulation do you mean the CRA? Or something else? The CRA applied only to deposit takers and not investment banks, hedge funds, pure mortgage lenders and the shadow banking system.
The majority of the subprime lending was made by non depository firms entirely free of CRA regulation. So what law forced these firms to make bad loans? They were free to make or not make loans as they pleased. That is a simple fact of the bubble, and one that you will have a hard time explaining away. The fact is that these firms were making subprime loans entirely because they chose to because it was immensely profitable while it lasted.