Krugman and Rajan

Paul Krugman responds:

Fannie Freddie Further: OK, some readers want to know my answer to Rajan’s defense on the FF issue. So, first of all, the first time I wrote about FF, I got something wrong — I was unaware of their late in the game rush into subprime.

But Rajan’s other point, that securitization numbers — which show a much reduced role for FF at the height of the bubble — are misleading, is just wrong.... Rajan makes much of the fact that the GSEs sometimes buy whole...