Here is a Speech from Dr. Paul in 2002. He lays the blame squarely on the Fed not only on the GSE’s:
“From the Great Depression, to the stagflation of the seventies, to the burst of the dotcom bubble last year, every economic downturn suffered by the country over the last 80 years can be traced to Federal Reserve policy. The Fed has followed a consistent policy of flooding the economy with easy money, leading to a misallocation of resources and an artificial “boom” followed by a recession or depression when the Fed-created bubble bursts. ”
Dr. Paul sees the Fed’s policies of creating bubble after bubble. So when he pointed out the problems with the GSE’s he was not talking about just the GSE’s but a misallocation of prices. By the way, can you clairify why you think that the GSE’s “had virtually nothing to do with the bubble”? I have the opinion that they had quite a lot to do with the bubble.
