As we all know there is an ongoing debate in politics between those who favor market solutions and those who believe that the government must intervene to protect the rich.

Okay, the first group may not exactly be market fundamentalists, but the government intervention help-the-rich faction is definitely calling the shots these days, especially when it comes to housing policy.

The economy is in recession and job loss is soaring. The banking system is on life support, with the Fed handing tens of billions of dollars to the country’s biggest banks at below market interest rates. Millions of homeowners are facing foreclosure, and more than ten million are now underwater in their mortgages, owing more than the value of their house.

In such dire circumstances, Congress did the only thing it could; it gave more tax breaks to banks and homebuilders.

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With the housing bubble in full meltdown, our political leaders are busily ignoring all the things they have said about the market over the last quarter century and looking to throw all the money that they can find to sustain the bubble. This would be comical, if it weren’t so painful.

Remember all the steel workers and autoworkers who lost their jobs due to trade agreements that were supposed to advance economic efficiency over the last quarter century? How about the workers in the airline, trucking, and telecommunications industry who lost jobs due to deregulation, which was also supposed to increase economic efficiency?

Well, it’s a new day. Nothing these people (or their economists) said matters anymore. It housing bubble support time!

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