[asinclair]

When the National Transportation Safety Board investigates a plane crash, they usually find that there isn't just one principal cause. An airliner crash is caused by a "failure cascade," a collection of things that go wrong, one after another, to combine to create a disaster.

I would be very interested to see an investigation a la NTSB of the disaster that is the housing market.

Blaming the Community Reinvestment Act of 1977 is an old exercise, one that I gave up espousing because the people on the other side of the argument just couldn't believe that such well-meaning legislation would trigger the start of such a failure cascade. "What about the greedy banks?" When you mention Fanny Mae and Freddie Mac as some of those "greedy banks" you get push-back of the strongest kind. Also, the people on the other side of the argument have problems understanding why banks repackage loans as investments — to reduce their risk and exposure. Actions that people do retail aren't understandable at all at the wholesale level.

The whole tale won't be told for a number of years yet. The academics won't be able to decouple their own self-interested enough to really see the dominoes until well into the century. Too late to really fix the problem.