technologies more accessible to the rest of the workforce. once technology becomes more user friendly, the ability of the general workforce to create value is greatly facilitated. what is particularly telling in this regard is how well the american economy has performed with a workforce for which the average level of education has been roughly unchanged for a quarter of a century. as labor markets tightened in the mid - 1990s, the anecdotal reports of worker shortages were worrisome. there were numerous stories of employers going through entire lists of people before finding someone who could do the job, and widespread concerns that a lack of high - tech skills among american workers would prevent much of the population from participating fully in the economic gains associated with the emerging high - tech revolution. consistent with these anecdotes, in a national survey of small businesses, the percentage citing labor quality as their most important problem rose from less than 5 percent in 1993 to 20 percent by 1998. as it turned out, however, the capacity for american businesses to absorb the less educated part of our workforce seems to have been far greater than these anecdotes implied. the unemployment rate for adults with a high school education or less fell from 4¾ percent in 1998 to around 4 percent by the middle of last year. and, while the proportion of small - business managers who worried about labor quality has remained elevated in the past few years, it did not increase further in spite of the decline in unemployment. one explanation for this phenomenon is the often - observed multiplier effects of technological breakthroughs. for example, as engineers and programmers have developed increasingly more sophisticated hardware and software, the vast productive benefits of computers have become far more readily available to the average worker in recent years. looking back a number of decades to the early stages of the information technology revolution, we can see that cobol and fortran were the “ visas ” into the world of technology. those workers without very sophisticated programming skills could not interface with the new computer - driven technologies and thus often could not take advantage of the potential productivity improvements associated with those technologies. but today ’ s increasingly user - friendly software has enabled workers with far less education and skills to engender value added from new technologies that their older brothers and sisters could not have foreseen a half generation earlier. in particular, we are finding that despite the awesome capabilities of our newer innovations, there are certain skills inherent in all human beings that technology cannot replicate. low - skilled workers in decades past had to rely principally on

somewhat less reliable data for 1901 to 1929 at face value, real weiss ( 1989 ) provides an overview of the evolution of mortgage lending over the past 100 years. snowden ( 1987 ) discusses regional variations in home mortgage rates at the end of the nineteenth century. in addition, the u. s. department of commerce ( 1937 ) provides information on mortgage rates for various u. s. cities for the 1920s and early 1930s. housing investment was about three times as volatile during that era as it has been over the past half - century. during the past century we have seen two great sea changes in the market for housing finance. the first of these was the product of the new deal. the second arose from financial innovation and a series of crises from the 1960s to the mid - 1980s in depository funding of mortgages. i will turn first to the new deal period. the new deal and the housing market the housing sector, like the rest of the economy, was profoundly affected by the great depression. when franklin roosevelt took office in 1933, almost 10 percent of all homes were in foreclosure ( green and wachter, 2005 ), construction employment had fallen by half from its late 1920s peak, and a banking system near collapse was providing little new credit. as in other sectors, new deal reforms in housing and housing finance aimed to foster economic revival through government programs that either provided financing directly or strengthened the institutional and regulatory structure of private credit markets. actually, one of the first steps in this direction was taken not by roosevelt but by his predecessor, herbert hoover, who oversaw the creation of the federal home loan banking system in 1932. this measure reorganized the thrift industry ( savings and loans and mutual savings banks ) under federally chartered associations and established a credit reserve system modeled after the federal reserve. the roosevelt administration pushed this and other programs affecting housing finance much further. in 1934, his administration oversaw the creation of the federal housing administration ( fha ). by providing a federally backed insurance system for mortgage lenders, the fha was designed to encourage lenders to offer mortgages on more attractive terms. this intervention appears to have worked in that, by the 1950s, most new mortgages were for thirty years at fixed rates, and down payment requirements had fallen to about 20 percent. in 1938, the congress chartered the federal national mortgage association, or fannie mae, as it came to be known. the new institution was authorized to issue bonds and use the proceeds to purchase fha mortgage