Foote: 12 Reasons Why the Mortgage Meltdown Wasn't an Inside Job

Economist Christopher Foote of the Boston Fed, who debunked the Freakonomics abortion-cut-crime theory in late 2005 by pointing out that Steven D. Levitt’s results stemmed from a couple of dumb mistakes in his programming, and two colleagues have a paper arguing against the mortgage meltdown being, in the words of the Oscar-winning documentary, an Inside Job (or, at least, of misaligned incentives):

Why Did So Many People Make So Many Ex Post Bad Decisions? The Causes of the Foreclosure Crisis 

Christopher L. Foote, Kristopher S. Gerardi, and Paul S. Willen 


This paper presents 12 facts about the mortgage market. The authors argue that the facts refute the popular story that the crisis resulted from financial industry insiders deceiving...

Proper Review
May 8th 2012
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