Steve Horowitz from The Austrian Economists blog has a simple. short and pithy essay on the causes of the current US recession.

Worth reading and it won’t take you long. A sample:

2. Fannie Mae and Freddie Mac The U.S. government imposed a variety of other institutions and policies that encouraged the lending binge that led to the recession. Fannie and Freddie are not products of “capitalism;” they are organizations created by the U.S. government, which has given them special privileges as well as an implicit taxpayer guarantee. Fannie and Freddie were mandated to purchase a certain percentage of the mortgages that banks originated with the credit created by the Fed, giving mortgage lenders every incentive to keep on making loans, even if the borrowers didn’t meet traditional lending criteria.

The rest

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