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thinkahol on 2011-06-13By John B. Taylor
This review is from a syndication service of The Washington Post.
In “Reckless Endangerment,” Gretchen Morgenson and Joshua Rosner argue that cozy connections between government and the financial industry were the primary cause of the financial crisis. While many economists—including this reviewer—have argued that government actions caused the crisis, Morgenson and Rosner use their investigative skills to dig down and explain why those actions were taken. The book focuses on two government agencies, Fannie Mae and the Federal Reserve.
The mutual support system is better explained and documented in the case of Fannie, the government-sponsored enterprise that supported the home mortgage market by buying mortgages and packaging them into marketable securities, which it then guaranteed and sold to investors.