It’s a shame that the conclusions of the FCIC report turned into yet another polarized political debate. It’s good that the report has substantial descriptive work, since knowing what happened is often more important over the long run than knowing what one group or another thinks is the cause or the solution.
I was surprised that there was no mention of the 1998 change to the tax law that allowed serial tax-free sales of primary or secondary homes. That allowance, amounting to $500K per year for a married couple who managed to alternate “primary” and “secondary” homes, gave small time investors (house flippers) the potential for earning the equivalent of a million dollars a year in ordinary income for buying houses or condos and throwing on a coat of paint and buying granite countertops and premium appliances.
Anyway, I just had a look at my own description of the causes and magnification of the problem and my proposed solution that I wrote back in the spring of 2008, months before Lehman, AIG, Fannie-Freddie, etc.