Blowing Bubbles: The 2008 Mortgage Crisis
Publication Date: January 2008
Publisher(s): Hoover Institution on War, Revolution, and Peace
Author(s): Richard A. Posner
Series: Hoover Digest
Keywords: Mortgage Crisis; Economy
Coverage: United States
Intelligence failures, the two "bubbles" (housing and investment), whether the parties involved were "ignorant or caluculating" in their investing, and the psychology that leads to behavior that often deviates from simple models of rational choice. Posner states that there will always be housing bubbles, and states that bailing out the buyers would set the stage for a future housing bubble. His concluding opinion is that there is nothing to be done.