Sometimes it occurs to me that maybe my conspiratorial views are totally baseless. For example, maybe the government wasn’t really trying to take over the banks or the energy sector. Here’s Arnold Kling:
As reporters ask me about the report, I in turn ask them where the real report is. I mean, I cannot believe that such a sketchy, half-baked proposal was given an official seal (two of them, one each from HUD and Treasury). My first reaction was that this was like a bad term paper from a public policy grad student.
I was close. As I reached out to colleagues to find out more, someone suggested I look up David Scharftstein a professor at The Business School, which is how Harvard folks refer to it. The resemblance between the Administration report and this paper by Scharfstein and Adi Sunderam is eery. Sunderam is a Ph. D candidate in the econ department at Harvard. So, basically, the Administration outsourced its policy on the entire future of housing finance to a professor and a grad student, neither of whom appears to have spent a single day working the mortgage industry.