banks and investment firms would never have made these loans
100%
While banks go for profit, like any company
Yet they did make them even when they had no further obligation to do so
they have to make sensible decisions to make the profit
Because of the CRA
The CRA didn’t force them to take up anywhere near the level of dubious debt they did
Read above
CRA ratings existed
they were hard pressed by regulators aswell
It contributed to demand, sure, but the government building roads doesn’t create booms and busts in the pavement sector
The state effectively distorted the mortgage market due to it's central planning
Thats not a good comparison
What kind of comparison would you want instead?
None
it cannot be compared
The CRA was a regulation that did force banks to make these loans, without it, it wouldn't have happened. But there was other things like CRA ratings
And the fact that the CHEAP CREDIT
was another huge factor
Both of those were going to cause a bust
And it was needed
my state’s mandating that people pay for drivers’ insurance doesn’t cause a huge increase in drivers insurance costs and payouts
What?
dude I'm telling you it can't be compared
it's what it is
A regulation that caused a crash
I’d actually agree with you that the Fed’s interest rates were at least a percent too low from 2003-2007.
not a percent, far too low
We don't even know how low because the market should control the rates
They were made based on a mistaken growth target.
it's central planning inefficiencies
These rates were as low as that under Obama for his whole 2 terms
A recession might happen
But that causes self-reinforcing positive feedback loops like the periodic panics and depressions of the 1800s that caused huge market volatility and made it hard for businesses to expand
due to cheap credit
Of course raising interest rates fast is also a problem
There was no cheap credit in the 1800s
it's what caused the 20-21 recession
There was
I listed it above
however there was cheap credit before the 20-21 recession aswell
