How about (3), a government not run by Bush/Greenspan/Krugman/Obama/Bernanke, a government not intent on creating housing bubbles in the first place? Let the b

How about (3), a government not run by Bush/Greenspan/Krugman/Obama/Bernanke, a government not intent on creating housing bubbles in the first place? Let the banks go bust by all means, but let's also recognize that government regulation/incentives ($440B from Fannie Mae!) was a large part of what got us into this mess. http://articles.cnn.com/2002-06-17/politics/bush.minority.homes_1_home-ownership-home-buyers-american-dream-down-payment-fund?_s=PM:ALLPOLITICS http://articles.cnn.com/2002-06-17/politics/bush.minority.ho... Fannie Mae, Freddie Mac and the federal Home Loan Banks -- the government-sponsored corporations that handle home mortgages -- will increase their commitment to minority markets by more than $440 billion, Bush said. Under one of the initiatives launched by Freddie Mac, consumers with poor credit will be able to obtain mortgages with interest rates that automatically decline after a period of consistent payments, he added. http://www.nytimes.com/2002/08/02/opinion/dubya-s-double-dip.html?src=pm http://www.nytimes.com/2002/08/02/opinion/dubya-s-double-dip... To fight this recession the Fed needs more than a snapback; it needs soaring household spending to offset moribund business investment. And to do that, as Paul McCulley of Pimco put it, Alan Greenspan needs to create a housing bubble to replace the Nasdaq bubble. Paul Krugman, 2002