2. WSJ Blog points to US Senator Charles Schumer ‘s speech on 4 subprime myths:
1. The Myth of Vastly Expanded Home Ownership from Subprime Lending
2. The Myth of the Unqualified Borrower
3. The Myth That Borrowers Can Easily Obtain Perfect Knowledge of The Terms of Their Mortgage Loans
4. The Myth that the Free Market Alone Will Fix Everything
3. Numerous suggestions are being floated to fix this subprime mess. Read Summers’ advice (suggest fiscal policy intervention) and Fisch et al ‘s suggestion (taking a cue from Savings & Loan crisis, provides excellent advice). Eminent economists comment on whether fiscal measures would help.
5. Ajay Shah says capital controls are futile.