Some publishers turned down your book idea. Why?
They felt that by the time a book on the 2008 financial crisis could be released, we’d be out of the woods. I said, “I don’t think so.” Main Street is still suffering mightily. Unemployment, foreclosures, delinquencies are still very high.
You aim to hold people accountable, including James Johnson.
He was really adept at manipulating Congress and neutralizing the regulator that was supposed to oversee Fannie Mae. It was all about protecting the government subsidy, about making sure guarantees and perquisites stayed in place.
Is today’s housing crisis going to be resolved any time soon?
Not really, unfortunately. There is a huge overhang of supply, which is partly why housing prices are falling across the nation. I think the American dream of home ownership has been damaged. It became a nightmare of home ownership.
Why was it vital to write an authoritative account?
So that maybe, just maybe, it won’t happen again. This crisis wasn’t an act of God or a force majeure, as some say. It was an act of man, with many participants over many years. At the center were Fannie Mae and Freddie Mac.
Housing as a source of wealth – realistic or not?
It was turned on its head in the crisis. People were encouraged to take out more loans on their homes. It was a bastardization of the forced savings idea, which allowed you to create wealth and transfer it to your children.