Here is an interesting article in Forbes.com about George Mason University Law professor Todd Zywicki’s upcoming book, Bankruptcy Law and Policy in the Twenty-First Century.

As Hoover Institute’s Peter Robinson notes:

[in his book], Zywicki picks a couple of fascinating fights.
One involves former Fed Chairman Alan Greenspan; the other, the entire band of academics, former business executives and career bureaucrats who make up the Obama administration’s economic apparat.

First, Zywicki explains how Greenspan created a bubble:

“What Greenspan overlooks,” Zywicki says, “are adjustable-rate mortgages. ARMs are really sensitive to shorter-term interest rates.”
“Look at the data going back to nineteen-eighties,” Zywicki continues. “When the spread between regular mortgages and ARMs is less than about 150 basis points, people tend to take out regular mortgages. But when that spread widens, they switch to ARMs.
“What Greenspan did was artificially drive down the prices of ARMs, widening the spread. Low interest rates on ARMs enabled ordinary Americans to get bigger mortgages than they would otherwise have believed they could afford. That pushed up home prices. And that created the updraft that brought in speculators.”

Then, Zywicki goes after the Obama administration:

According to President Obama himself, the “crisis” is “unraveling homeownership, the middle class and the American Dream itself.”
Zywicki’s reply? Nonsense.
His research has revealed three distinct types of housing markets–and only one of the three shows real signs of distress. Even then, that distress is only in a limited number of areas.

Read the whole thing here. Also read Brian Caplan’s blog post today about Todd’s position here. And check out this interesting debate about Greenspan’s role in the housing crisis here.