Peter J. Wallison tries to revive the claim that the government alone caused the financial crisis, which seemed to be the consensus in the Bloomberg debate as well. Jeff Madrick and Frank Partnoy smack it down:
The [Government Sponsored Entities, meaning Fannie and Freddie] did generate large losses, but their bad investments in housing loans followed rather than led the crisis; most of those investments involved purchases or guarantees made well after the subprime and housing bubbles had been expanded by private loans and were almost about to burst. Even then, the GSEs’ overall purchases and guarantees were much less risky than Wall Street’s: their default rates were one fourth to one fifth those of Wall Street and other private financial firms.
I don't think Fannie and Freddie and the paternalist mindset behind them should be left off the hook. But perspective matters. Like our healthcare crisis, this one was largely caused by an incompetent private sector. I know that violates GOP dogma; but it's true nonetheless, as even Alan Greenspan himself has conceded.
The Dish 