Why did liberal politicians push for universal home ownership then blame capitalism when it backfired?
I respectfully disagree with Tribeca and especially with Les S. There is plenty of blame to go around to both parties, but it was government intervention into the housing market (i.e., anti-capitalist policies) that caused this huge meltdown. You cannot minimize the devastating effect of federal regulation on the banking industry. First of all, Freddie and Fannie were created by the federal government. Without the feds’ government intervention these entities would not even exist, much less control the entire industry by virtue of its 50+% market share, which is (or was) worth multiple trillions of dollars. No private company (i.e., in a purely capitalist system) could have accomplished that; there was simply too much competition out there for such a monopoly to be created in a free market. Secondly, there has been constant intervention by the Feds (pre-Bush) into the way Freddie and Fannie are operated. For example, the Federal Housing Enterprises Financial Safety and Soundness Act of
