Peer-Reviewed Research
We show that the Federal Housing Administration (FHA), from its inception in the 1930s, did not insure mortgages in low income urban neighborhoods where the vast majority of urban Black Americans lived. This pattern emerged before the Home Owners’ Loan Corporation (HOLC) drafted its infamous maps. In contrast, the HOLC itself broadly loaned to core urban neighborhoods and to Black homeowners. We conclude that the mechanisms through which the HOLC's maps could have affected the geographic scope of mortgage lending were likely quite limited. The FHA instead evaluated neighborhoods using block-level information developed in the 1930s and other data, rather than on the basis of the HOLC maps.
with Price Fishback, Jonathan Rose, and Kenneth Snowden Journal of Urban Economics May 2024 and NBER September 2021
Discussed on The Weeds and in Governing. Cited in the 2021 Economic Report of the President and the PAVE Report.
ABSTRACT
James J. Saxon sought to transform American banking as Comptroller of the Currency, the regulator of national banks, from 1961 to 1966. As a regulatory entrepreneur, he attempted to unleash what he perceived as overly regulated national banks in order to stimulate the American economy. Saxon impacted many small towns by chartering new banks and breaking up ‘Rotary Club cartels.’ He loosened many regulations, induced numerous banks to switch to national charters, and sparred with fellow regulators and Congress, but ultimately failed to implement much of his agenda. The half century that followed saw his vision realized as the American financial sector occupied a historically disproportionate fraction of the economy. Saxon marks an inflection point between aggressive New Deal financial regulation and the deregulatory movement leading up to the Great Recession. Saxon serves as an example of the dangers in zeal outstripping tact in efforts to effect organizational change. He also provides an anomalous example of a bureaucrat breaking from the stereotype of colorless evenhandedness. As memories of the Great Recession fade, Saxon serves as an example of the risks of a deregulatory process and the importance of a delivery mechanism for ideas for today’s bankers, regulators, and public officials.
Chapters in Edited Volumes
in Knowledge and Entrepreneurship in Public Policy edited by Christopher Coyne, Abigail Hall, and Eileen Norcross, Rowan & Littlefield, 2023 [DRAFT PDF]
in Institutions and Incentives in Public Policy: An Analytical Assessment of Non-Market Decision-Making edited by Rosolino Candela, Rosemarie Fike, and Roberta Herzberg, Rowan & Littlefield, 2022 [Draft PDF]
Other Writing
with Kenneth Snowden at EH.net November 2019