''The Housing Boom and Bust'' is a non-fiction book written by

Thomas Sowell Thomas Sowell (; born June 30, 1930) is an American author, economist, political commentator and academic who is a senior fellow at the Hoover Institution. With widely published commentary and books—and as a guest on TV and radio—he becam ...

about the

United States housing bubble The 2000s United States housing bubble was a real-estate bubble affecting over half of the U.S. states. It was the impetus for the subprime mortgage crisis. Housing prices peaked in early 2006, started to decline in 2006 and 2007, and reac ...

and following subprime mortgage crisis. The book was initially published on April 24, 2009, by Basic Books and reissued on February 23, 2010.

Summary

Sowell, a Senior Fellow at the

Hoover Institution The Hoover Institution (officially The Hoover Institution on War, Revolution, and Peace; abbreviated as Hoover) is an American public policy think tank and research institution that promotes personal and economic liberty, free enterprise, an ...

, explores political and economic causes of the American housing crisis. For example, he links the

Community Reinvestment Act The Community Reinvestment Act (CRA, P.L. 95-128, 91 Stat. 1147, title VIII of the Housing and Community Development Act of 1977, ''et seq.'') is a United States federal law designed to encourage commercial banks and savings associations to hel ...

to decreased lending standards that resulted in an increase of subprime mortgages, as the law forced banks to set up quotas of lending to minorities. As a result, "lenders had to resort to 'innovative or flexible' standards." He also contrasts housing prices for modest middle-class homes in California and Texas and theorizes that California, with open space and various other zoning laws, had homes that were more expensive than those of similar size in Texas, which lacks such laws. Politically, Sowell targets the

George W. Bush administration George W. Bush's tenure as the 43rd president of the United States began with his first inauguration on January 20, 2001, and ended on January 20, 2009. Bush, a Republican from Texas, took office following a narrow victory over Democratic ...

and Congress members of both major political parties for obstructing audits of

Fannie Mae The Federal National Mortgage Association (FNMA), commonly known as Fannie Mae, is a United States government-sponsored enterprise (GSE) and, since 1968, a publicly traded company. Founded in 1938 during the Great Depression as part of the N ...

and

Freddie Mac The Federal Home Loan Mortgage Corporation (FHLMC), commonly known as Freddie Mac, is a publicly traded, government-sponsored enterprise (GSE), headquartered in Tysons Corner, Virginia.Reason Reason is the capacity of consciously applying logic by drawing conclusions from new or existing information, with the aim of seeking the truth. It is closely associated with such characteristically human activities as philosophy, science, ...

'' magazine summarized his stance: "the immense local variability in housing prices and failed loans reveals that the government mistook a set of local problems for a national one."

Critical reception

Walter E. Williams Walter Edward Williams (March 31, 1936December 1, 2020) was an American economist, commentator, and academic. Williams was the John M. Olin Distinguished Professor of Economics at George Mason University, as well as a syndicated columnist ...

, a colleague of Sowell and economics professor at George Mason University, called the book "an eye-opener for anyone interested in the truth about the collapse of the housing market that played a major role in our financial market crisis." For ''

The American Spectator ''The American Spectator'' is a conservative American magazine covering news and politics, edited by R. Emmett Tyrrell Jr. and published by the non-profit American Spectator Foundation. It was founded in 1967 by Tyrrell, who remains its editor- ...

'' magazine, Joseph Lawler considered ''The Housing Boom and Bust'' "an examination of the ruling class's inability to leave well enough alone." Art Carden wrote in a positive review that the book would appeal to both specialists and non-specialists, and argued, "Morality tales featuring clear villains, easy-to-identify victims and valiant saviors riding to the rescue might be appealing, but they obscure the systemic problems that produced the crisis. ..Sowell, by contrast, offers a more complete explanation in which he identifies the relevant actors, the incentives they faced, and the historical conditions they faced."

Robert J. Samuelson Robert Jacob Samuelson (born December 23, 1945) is a conservative journalist for '' The Washington Post'', where he has written about business and economic issues since 1977. He was a columnist for '' Newsweek'' magazine from 1984 to 2011. Car ...

, reviewing the book for ''

Newsweek ''Newsweek'' is an American weekly online news magazine co-owned 50 percent each by Dev Pragad, its president and CEO, and Johnathan Davis, who has no operational role at ''Newsweek''. Founded as a weekly print magazine in 1933, it was widely ...

'', commented: "Although one-sided, Sowell's account qualifies the standard story that greedy investment bankers and mortgage brokers caused the whole crisis."

References

{{DEFAULTSORT:Housing Boom And Bust United States housing bubble 2009 non-fiction books Basic Books books Books about politics of the United States Books by Thomas Sowell Non-fiction books about the Great Recession Works about the subprime mortgage crisis