Someone defined insanity as doing the same thing over and over expecting different results. That seems to be a chosen mode of operation in some political corners these days. For an example, see ‘Hidden in Plain Sight': A Q&A with Peter Wallison on the 2008 financial crisis and why it might happen again
“Legislation can only be effective if it is drawn up by a Congress that understands the nature of the problem it is supposed to solve. Dodd-Frank was based on the false idea that the 2008 financial crisis was caused by insufficient regulation of the private sector. This narrative supported what the 2010 Democratic Congress wanted to accomplish—the imposition of much greater regulation on the US financial system—but did not come close to identifying or addressing the government policies that were the actual cause of the crisis. Indeed, by absolving the government from any role in the crisis, the supporters of Dodd-Frank left the government free to do the same thing again—something that is occurring right before our eyes. The president’s proposal last week to reduce the FHA’s insurance premiums, and the FHFA’s ruling that Fannie Mae and Freddie should accept 3% down payments on mortgages, are only the most recent examples that we are on our way to repeating a very sad history.”
“The key question is whether the American people have learned that it was the government’s housing policies, and not the risk-taking and greed of the private sector, that caused the 2008 financial crisis. With that understood, we can have a genuine national debate on whether the US should continue a government role in the housing finance system. At the moment, the signs are not good.”
It does sound so nice – for everyone to be able to own their own home. The problem occurs when it is decided that the government is the agent to be used to accomplish this idea. Then, when the results of that effort hit home, the ‘sounds nice’ crowd get into rationalizations that choose an ‘evil capitalist’ to explain the failure. That continues to downward spiral of solving the wrong problem, creating more problems, and spending ever more resources on solutions to the wrong problems.