Financial firms have properly been pilloried for their role in bringing on the financial tsunami, but at least they’re getting a re-regulatory look. Lurking beneath the financial, legal and media surface is another ongoing saga: government pouring torrents of money into our effectively nationalized housing markets.
Most politicians don’t want to highlight the dangers of housing finance because their own votes helped cause the problem and now legally entrench a dysfunctional system. Moreover, many of the most immediate targets of the government’s apparent largesse are not fat-cat bankers, but low-income Americans. Nobody wants to pick on the poor. Stunning fiscal irresponsibility afflicts the lower-end housing sectors, though, much as legal laissez faire has corrupted fancy financial boardrooms.
