Travis Rowley takes on the talking point that the “Bush tax cuts” and the deregulatory impulse are what (say it with me) got us in this mess in the first place.  The core of the argument goes to those government-sponsored enterprises (GSEs) that backed mortgages for lower-income families:

Whenever Democrats cite “the failed policies of the past” in order to refer to Republican promises to loosen up government guidelines placed on private enterprise, they are purposely confusing plans to deregulate the marketplace with the lack of oversight on Fannie Mae and Freddie Mac – government-sponsored agencies (GSEs) that prominent Democrats sought to protect from Republican reforms.
As early as 2001 the Bush administration was warning that the size of Fannie Mae and Freddie Mac was a “potential problem” that could “cause strong repercussions in financial markets.” And Congressman Ron Paul (R) spoke of an existing real-estate bubble, and predicted that it “will burst, as all bubbles do.”

Put differently, it wasn’t the deregulation that caused the problem; it was the promise of bailouts if things went wrong.  As I’ve pointed out in various parts, Fannie and Freddie became an alternative to government debt for a safe investment at a time when the stock market was creating more prospective money than even existed in the gross domestic product (GDP). …
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