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Larry Summers: How to Fix the Housing Market

Want to hold your own in a wonky discussion of the housing crisis? Former White House economic adviser Larry Summers has offered a helpful guide in today’s Washington Post. The Harvard economist lays out five steps to stabilize the tanking housing market, including relaxing credit standards for would-be buyers, making it easier to refinance, and experimenting with innovative ways to prevent foreclosures. But the big takeaway is that if you’re looking for someone to blame for the lack of recovery in the market, look at Fannie Mae and Freddie Mac. If these government-sponsored enterprises, which were designed to prevent crises like the one we’re currently facing, adopted the outlined approaches, Summers predicts things would improve—fast: “Far better policies could be in place in six months and the tone of the market could improve immediately.”