[E.g.,] the media, [Dean Baker] argues, "are blaming the economic collapse on a 'credit crunch' instead of the more obvious problem that consumers just lost $6 trillion of housing wealth and another $8 trillion of stock wealth" ... He points out that even though mortgage rates have plummeted, the number of applications for new loans has dropped to very low levels and argues it's "the most glaring refutation of the claim that people are unable to get credit." If creditworthy applicants were being denied loans by banks unable or unwilling to lend, Baker explains, "then the ratio of mortgage applications to home sales should be soaring" as qualified homebuyers apply to multiple banks for a loan. "Since there is no notable increase in this ratio, access to credit is obviously not an issue"... --<http://www.alternet.org/story/115768/>
Doug Henwood wrote:
>
> On Jan 1, 2009, at 12:15 PM, C. G. Estabrook wrote:
>
>> Was the 'Credit Crunch' a Myth Used to Sell a Trillion-Dollar Scam?
>
> No. Kneejerk skepticism is as bad a flaw as reflexive credulity.
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