Reddit mentions of The Great Recession: Market Failure or Policy Failure? (Studies in Macroeconomic History)

Sure, I recently made a post putting the entire recession into a colloquial timeline.
>Bursting of the dot.com bubble and 9/11. Hope the economy doesn't shirk into a recession. FED slashes rates which drops mortgage rates down. Demand for housing increases tremendously. Uh oh. Looks like adjustable rate mortgages are coming! Demand for houses increases even more! Increased deman for houses mean construction companies are much more profitable. This means more firms will enter the market. Increase in supply! Housing prices will rise and people will buy today instead of at future prices which will presumably be higher. The general assumption, among banks (yes) AND EVERYONE ELSE, was that housing prices would continue to rise and if someone defaulted on their mortgage, they could just sell their house at a higher market price. At about this time the fed raised rates again which meant millions of people were defaulting on mortgages they could never pay off. Prices spiraled downwards but people were reluctant to sell their homes as the value declined.

>Did banks play a role in this? Sure. Is there more to the story than that? Obviously.

Most recently, Robert Hetzel, a senior economist at Federal Reserve Bank of Richmond wrote an analysis putting the blame squarely on the Fed. The poorly timed rates increase and misuse of monetary policy had a large effect.