Review Questions for Thomas Sowell’s Housing Boom and Bust

Liberty In the Books reviewed Thomas Sowell’s The Housing Boom and Bust. These are the review questions (for the original edition; there has since been a revised edition).

Reading Section I: Through Chapter 3

1. What were the general real-estate trends from 2000 to 2005?

2. How does the Federal Reserve influence mortgage trends?

3. What were the land use restrictions of the 1970s, and what were their effects?

4. In Sowell’s view, what was the actual nature of the “affordable housing crisis,” and what was the political response?

5. What were the “creative” ways to finance mortgages, and how were they influenced by federal policy?

6. What is the history and impact of the Community Reinvestment Act?

7. What were the impacts on the housing market of Freddie and Fannie, HUD, and the FHA?

8. Who issued warnings about a housing bubble? Who ignored those warnings?

9. What was the political response to the housing bust? “How’s that working for you?”

Reading Section II: Chapters 4-5

1. What does Sowell mean by a “vision?” (Page 90)

2. What are the various aspects of the housing “vision” that created the housing boom and bust? (Pages 90, 95)

3. How does the “vision” of some relate to the narrow interest of others? (Page 91)

4. What was the Millennial Housing Commission and what where its findings and errors? (Page 92)

5. What was the brief history of political interference in housing in the 19th and 20th Centuries? (Pages 92-94)

6. What were the various motivations behind the crusade against alleged lending discrimination? (Pages 95-97)

7. Besides income, what are the other relevant factors related to mortgage lending? (Pages 98-100, 104)

8. How did government agencies and media outlets sensationalize lending statistics? (Pages 103)

9. In what ways did the federal government “encourage” banks to make risky loans? (Pages 105-107)

10. What impact did political interference in housing have on minorities? (Page 108)

11. In a political context, what is the meaning of terms like “community,” the market,” and “social?” (Pages 110, 113-114)

12. How are costs weighed in the market and in the political sphere? (Pages 114-116, 119-121)

13. Describe the background and implementation of Section 8 Housing. (Pages 123)

14. Compare the comments of George W. Bush and Hillary Clinton before and after the housing bust. (Pages 95, 123)

15. What problem did the FDIC seek to address, and how was that problem caused? (Pages 124-125)

16. Compare the administrations of Hoover, FDR, and Obama. (Pages 131-132, 141-145)

17. What is the effect on the economy and on politics of politically-funded jobs? (Pages 133-134)

18. What were the major interventions of the Great Depression that Sowell reviews? (Pages 135-136)

19. In Sowell’s view, why did the Great Depression come to an end? (Pages 137-139)

20. What is the significance of the comment, “You never want a serious crisis to go to waste”? (Page 143)

21. BONUS QUESTION involving optional reading: Compare and contrast the views of Sowell and Robert Higgs ( ) regarding the relationship of WWII and economic recovery.