Author: terrysu@stanford.edu

Public Administration

Reviews 2015 Reviewed by Caner Bakir After the onset of the Global Financial Crisis (GFC), Britain’s Queen Elizabeth II asked economists at the London School of Economics in November 2008, ‘Why did no one see it coming?’ Orthodox economists and political economists, and international political economy (IPE) scholars, especially those belonging to the American IPE, have had a dismal record in anticipating financial crises (Palan 2009)…. » Download the...

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Obama cutting mortgage fees for FHA borrowers: Good news for housing market?

The Christian Science Monitor January 8, 2015 By Mark Trumbull Calomiris and Haber’s research is mentioned in this article. Similarly, finance experts Charles Calomiris and Stephen Haber argue that easy-credit policies are unstable for both the households who are enticed to borrow and for the financial system as a whole. They note that the Obama administration also has recently lowered underwriting standards for other government-chartered home loan programs (those backed by Fannie Mae and Freddie Mac). Read the entire article at The Christian Science...

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Redistributive Credit Policies Won’t Fix Inequality

Economic Policies for the 21st Century December 30, 2014 by Charles W. Calomiris and Stephen Haber Mel Watt, Director of the Federal Housing Finance Agency, recently announced that he will reduce the minimum mortgage down payment requirement for Fannie Mae and Freddie Mac – the housing financing behemoths that he controls as their conservator since the financial crisis – to three percent. This marks a return to pre-crisis down payment standards, and a departure from the traditional 20 percent requirements that had been standard prior to the 1990s, and which had once again become the norm since the financial crash. The stated goal is to expand opportunities for low-income borrowers, and thus help to mitigate economic inequality. But intentions and consequences can be very different. Similar attempts to subsidize risky mortgages in the 1990s and 2000s ended up increasing inequality. Congress should be wary of allowing Director Watt to take such a step. Read the entire article at Economic Policies for the 21st...

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