Kevin Villani

The current partisan war over the Dodd-Frank Act is just one dispute in a broader ideological divide about the government’s role in industry.

Current proposals about what to do with Fannie Mae and Freddie Mac that still focus on a government-backed solution are misdirected.

The federal government is now even more involved in the design, pricing, allocation and servicing of home mortgage credit than during the subprime lending debacle. Current proposals that call for government involvement would further entrench this situation.

Loans with little or no down payment were the root cause of the recent financial crisis. The failure to save for health care and retirement is the root cause of the next financial crisis.

The effects of a loose monetary policy were compounded by housing policy – not just the "affordable" housing goals set for Fannie and Freddie but also CRA quotas imposed on banks.

Politicians and regulators want taxpayers to believe two things: first, that financial crisis had multiple complex causes mostly related to excessive risk-taking, conflicts of interest and deregulation — a view unconvincingly supported by the exculpatory 662 page summary Report of the Financial Crisis Inquiry Commission; second, that public regulation is a sisyphean task requiring the 2313 page Dodd-Frank Act. This diagnosis and prescription are both wrong.

In their path-breaking 2009 book "This Time Is Different: Eight Centuries of Financial Folly" economists Carmen Reinhart and Kenneth Rogoff conclude it never is.