Scapegoating Markets

Excellent Tribune editorial today. In part:

Another factor was something deregulation critics omit: a push to expand home ownership to borrowers who once were considered too risky. Economist Stan Liebowitz of the University of Texas at Dallas writes that "in an attempt to increase homeownership, particularly by minorities and the less affluent, an attack on underwriting standards was undertaken by virtually every branch of government." The result was to feed the housing bubble—and to expand the number of victims when it burst.

Then there was the big role played by mortgage giants Fannie Mae and Freddie Mac, government-sponsored entities whose failure is a testament to the dangers of mixing public and private enterprise. Conservatives had long warned that the government's implicit backing of these companies would someday mean a big bill for taxpayers. Guess what? They were right.