Economist Robert Schiller began his work in the New York Times Sunday morning with a chilling line: “We have to consider the possibility that the housing price downturn will eventually be as big as that of the last truly big decline, from 1925 to 1933, when prices fell by a total of 30 percent.” He then documents the big ideas to stablize the American family that came out of the Great Depression–FHA, expanded bankruptcy protection, FDIC insurance. Seventy years later, the main response to the housing meltdown has been a proposal for a super-SIV to keep money flowing to the banks that have sunk themselves in bad real estate mortgages.
This is a companion discussion topic for the original entry at https://talkingpointsmemo.com/?p=1250682