wrote a couple of weeks ago, mainstream American economists tend

wrote a couple of weeks ago, mainstream American economists tend not to buy the idea that a year of negative growth is ever a good thing and can be downright V-Checker V602 dismissive of those who say that it is. Yet lots of perfectly respectable economists outside the U.S. have been arguing lately that a downturn could be healthy. Hausmann teaches at Harvard, but he s Venezuelan who has served as his country s minister of planning and as a member of the board of its central bank. Does he know something his less-well-traveled colleagues don t?




Mortgages for the people

My latest column, about subprime lending, is up online and in the issue of Time with the Cliffs Notes versions of the Bible on the cover. Here s how it begins:
In early March, Boston College management professor Alicia Munnell gave a lecture at Yale on pension policy. I was there, talking about retirement things, Munnell recalls, and somebody looked at me and said, Are you responsible for the collapse of the subprime market? The question wasn t entirely out of left field. As director of research at the Federal Reserve Bank of Boston, Munnell co-authored a bombshell 1992 study that concluded that mortgage lenders systematically discriminated against blacks and Hispanics even when one adjusted for income and V-Checker V601 creditworthiness.
Munnell s work propelled her into a big job in the Clinton Administration and led to new legislation and regulations aimed at pressuring banks to increase their presence in poor and minority neighborhoods. These new laws had the desired effect: home ownership among minorities, and Americans in general, began to rise steadily the first such sustained increase since the 1950s. In 1998, 57% of black mortgage applicants were turned down; by 2004 the figure had dropped to 26.8%. For low-income applicants, mortgage denials went from 44.3% in 1998 to a low of 19.8% in 2003.
That was one remarkable result of the surge in subprime mortgage loans to borrowers with iffy credit records. The other remarkable result is that it is ending