The Mortgage Mess, the Press, and the Politics of Inattention
- (pp. 77-81)
Abstract
In reviewing the Challenger tragedy, Richard Feynman identified a flawed O-Ring as the proximate cause and NASA's flawed safety culture as a deeper cause. There has been no similar investigation of the mortgage mess, which has been baptized rather than understood. In part, this is due to committed ideological views in the public and press that eliminate the call for expert analysis and reform. Broader and deeper policy problems are identified and illustrated using NASA's past behavior and FHA's ongoing behavior. The Columbia tragedy sounds an ominous warning on the future stability of housing finance markets.Citation
Caplin, Andrew, and Roy Lowrance. 2014. "The Mortgage Mess, the Press, and the Politics of Inattention." American Economic Review, 104 (5): 77-81. DOI: 10.1257/aer.104.5.77Additional Materials
JEL Classification
- D72 Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
- G21 Banks; Depository Institutions; Micro Finance Institutions; Mortgages
- G28 Financial Institutions and Services: Government Policy and Regulation
- R31 Housing Supply and Markets
- R38 Production Analysis and Firm Location: Government Policy