The Housing Boom and Bust

The inimitable Thomas Sowell casts a critical eye at the bubble that shattered the world economy - a cautionary tale that will be sure to spark controversy. Scary headlines and scarier statistics tell the story of a financial crisis on a scale not seen in decades. Moreover, this is a worldwide financial crisis. Financial institutions on both sides of the Atlantic have either collapsed or have been saved from collapse by government bailouts, as a result of buying securities based on housing values that eroded or evaporated. This financial tsunami has been followed by a political flood of rhetoric, accompanied by finger-pointing in all directions. Who was really responsible? What set this off? There was no single, dramatic event that set this off, the way the assassination of the Archduke Ferdinand set off the chain of events that led to the First World War or the way the arrest of political operatives committing burglary at the Watergate Hotel led to the resignation of President Richard Nixon. A whole series of very questionable decisions by many people, in many places, over a period of years, built up the pressures that led to a sudden collapse of the housing market and of financial institutions that began to fall like dominoes as a result of investing in securities based on housing prices. "The Housing Boom and Bust" is designed to unravel the tangled threads of that story. It also attempts to determine whether what is being done to deal with the problem is more likely to make things better or worse.