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At Reason’s 40^th anniversary event, held in Hollywood on November 14 and 15, the American Enterprise Institute's Peter Wallison analyzed the roots of the current market meltdown and explained how government policies directly caused or massively exacerbated the housing bubble and the subsequent bust at the center of things.

This 25 minute video (Peter Wallison: The Roots of the Financial Crisis) is a little hard to follow because at first you don’t realize Wallison is reading from a projected Power Point slide and his delivery is not crisp. However, it is helpful to hear a fairly concise summary of the two major causes of the mortgage meltdown, both creations of the Federal government.

Follow the politicization of housing via the “Community Reinvestment Act” (CRA) and the creation, and later manipulation of two “Government Sponsored Enterprises” (GSE’s)--Fannie Mae (Federal National Mortgage Association or FNMA) and Freddie Mac (Federal Home Loan Mortgage Corporation, or FHLMC). 

You will then see how difficult it will be for that same government to get us out of the problem. Without citizen involvement and oversight, they will continue to make insane laws and then try to obscure their own responsibility for the crisis.

It all reminds me of a cartoon I once saw of an office door in a building in Washington, D.C. that had the title, "Department of Obfuscation".  Today it would be called, "CYA Department" (Cover Your "Assets").