I am not an economist, but I do pay attention to political events, and so let me give an overview and explanation of the provenance of the current economic crisis. The philosophical reason: to European democrats and our progressive Democrats today, the aim of government is the equality of all. This was pointed out by Daniel Patrick Moynihan at a time when the Democratic Party, as is the current conservative view, had as its aim liberty (opportunity) for all. The result, the Carter Administration signed into law the Community Reinvestment Act. The laudable intent was to do away with red-lining, whereby certain areas do not have access to bank loans since they do not meet fiduciary standards. Progressives argued that this amounted to racism, a term that inspires such fear that almost all cower in its shadow. Banks were threatened with legal action if they did not give loans to where they were previously unavailable. And so they did. Under the Clinton Administration, this not only continued, but the avalanche picked up speed, with Clinton HUD Secretary Andrew Cuomo announcing how he had forced banks to give even more loans against their interests (no pun intended): [youtube]<object width="425" height="344"><param name="movie" value="http://www.youtube.com/v/ivmL-lXNy64&hl=en&fs=1"></param><param name="allowFullScreen" value="true"></param><param name="allowscriptaccess" value="always"></param><embed src="http://www.youtube.com/v/ivmL-lXNy64&hl=en&fs=1" type="application/x-shockwave-flash" allowscriptaccess="always" allowfullscreen="true" width="425" height="344"></embed></object>[/youtube] Further, Freddie Mac and Fanny May increased making risky loans from 42% to 50% of their loans. Democrat Senator Dodd fully backed the program, and concurrently received sweetheart mortgage-loans on property that he owns. Tapes May Tell Tale Of Dodd Deal -- Courant.com He and Democrat Representative Barney Frank thwarted Bush Administration attempts to rein in the loans, (Frank's fingerprints are all over the financial fiasco - The Boston Globe) many of which fell under the slogan NINJA loans: no income, no job, no asset. In truth, the Bush Administration also like beating its chest over the numbers of home-ownership by minorities, and had they braved the racism-appellation we may have dodged the bullet. As is truly said, The road to hell is paved with good intentions. That is why I believe the conservative path, giving people the opportunity is the one that pays off in the end.