In last week’s CI CyberNews CyberPoll, we asked readers if they felt that the collapse of the housing market was caused chiefly by lax regulation or the failure of the Fed’s monetary policy. The majority (68.75%) voted for regulation failure, while the remaining votes fell to monetary policy failure and other (15.625% each).

Comments included:

“Regulation will always lag behind market behavior. Thus, they will always be chasing their tails. The bad incentives provided by unwise monetary policy (well documented at this point) create these failures. We must let the free market price system work. The government’s constant interventions prevent the free market price system from working.”

“Certainly, the Fed has played a large role in the collapse of the housing market, but there is more than enough blame to go around. Ultimately, Congress should be held responsible, as it has the power to institute regulations for the Fed to enforce.” -- Janelle Baranowski, Pacific Industrial Development Corp. (PIDC)

“The SEC failed to regulate the bond rating firms, allowing high-risk mortgage-based securities to be sold to investors and insured by greedy insurers.”

“Monetary policy doesn’t control everything. It's only part of the puzzle.”

“It’s also an enforcement failure, as the Fed and SEC chose to turn a blind eye.”

“Fannie Mae and Freddie Mac are failures as institutions to beneficially regulate private industry.”

Of the readers who chose the “other" category, some commented:

“Greed, unlimited selfishness, which is not treated as crime.”

“High fuel prices matched with poor lending sustainability policies.”

“1. Developers overbuilding.
2. Government forcing banks to loan 100% plus to people that could not make the payments.
3. Acorn putting pressure on the banks with government backing to put people in homes that could not afford them.
4. Congress lying about the condition of Freddie and Fannie.
5. Wall Street packaging bad loans with good loans and selling them. Over-leveraging!”


Many thanks to all of the CI CyberNews readers who have participated in our CyberPolls! Not a CI CyberNews subscriber? Follow this link to sign up for your free subscription!