A Nobel Prize for Economics or Evil? | Feb 13th at 10:39am
This panel is great—it’s called After the Credit Freeze Thaws: Are Mortgage-Backed Securities the Best Way to Finance American Homeownership? That question hasn’t been answered yet. But Austan Goolsbee, staff director and chief economist of the president’s economic recovery advisory board, made a funny (?) joke that subprime mortgages were either worthy of a Nobel prize for economics — or just pure evil—since subprime loans are essentially loans to people who don’t pay their bills.
Peter Engberg Jensen, apparently the guy who first created mortgage-backed securities, contends that there’s nothing wrong with subprime loans. They have been around for decades. The problem is that subprime loans were used for house appreciation—or a trip to Las Vegas—that’s when you have a problem.
Diana Lind is editor in chief of Next American City.
