Paul Krugman responds to readers’ comments on his Oct. 30 column, “Bursting Bubble Blues.”

Brian Collins, Concord, Calif.: What exactly can the Fed do to crack down on irresponsible mortgage lenders? Can it ban these interest-only mortgages?

Paul Krugman: The Fed has a lot of power to issue lending regulations. In fact, it’s starting to do that now — closing the barn door long after the horse is gone.

John Jones, Waynesville, N.C.: If anyone is to blame for the current situation, it is Mr. Greenspan, who pooh-poohed warnings about an emerging bubble and did nothing to crack down on irresponsible lending. I am not a supporter of Greenspan, but I remember him expressing concern over the inflation in housing prices — and as I recall, he began the steady rise in the overnight rates charged by the Federal Reserve in part in an attempt to dampen the speculation in housing sales and expressed some concern that these actions failed to increase mortgage rates and admitted that he really did not understand why. Is this correct?

Paul Krugman: No, not really. Greenspan waited until the housing bubble was almost at its peak before admitting that there was some “froth” in the market. His 2004 remark, which I quoted, was part of a longer disquisition in which he actually denied in principle the possibility of a housing bubble.

Neeraj Mehra, Amritsar, India: Mr. Greenspan has done a disservice to the nation by creating the housing boom. As a layman-observer, that’s the lingering thought I’ve had. Your article reaffirms it.

The question I have is this: Did he do the right thing — acting morally by engineering a housing boom, more as a bridge loan, until something else showed up at the horizon to shore up the economy — because he didn’t have a choice, or did he undertake a path of mere political expediency? And, that’s a question that’s nagging me for a while.

Would appreciate it if you could shed some light.

Paul Krugman: As Paul McCulley of PIMCO remarked when the tech boom crashed, Greenspan needed to create a housing bubble to replace the technology bubble. So within limits he may have done the right thing. But by late 2004 he should have seen the danger signs and warned against what was happening; such a warning could have taken the place of rising interest rates. He didn’t, and he left a terrible mess for Ben Bernanke.

James Abeel, Ajijic, Jalisco, Mexico: Is there a budding real estate tax problem arising from this housing slump? I come from the most overpriced county in the U.S., Essex County, Mass., where the real estate taxes, of course, have ballooned with the housing prices. In Massachusetts, the Republican governors have been cutting state-supported programs, putting a high amount of stress on the cities and towns to raise real estate taxes forcing many to move away — not an uncommon problem in the Bay State. If middle-class homeowners can not sell or buy homes, as the axe cuts both ways, what are the chances of these same people of paying high real estate taxes?

Paul Krugman: Yes, indeed: real estate taxes are based on past values, and could become very nasty in a falling market.

Bill Brawley, Etna, N.H.: Three questions:

What comparisons can be made between the current housing bust and the savings and loan debacle of the late 80’/early 90’s?

It’s remarkable how regional markets have boomed and busted in near-perfect synchronicity. It’s also notable how suddenly the chill set in, everywhere. Can this be attributed to the Internet’s ability to speed delivery of information, and, if so, would that worsen the situation?

Finally, how worried should we be about the integrity of the banking system with integrity carrying the full load of its connotations?