The Fed and housing

Over most of the last decade the federal government has made it official policy to support the housing sector through various regulations and the activities of government entities such as the Federal Housing Administration, Freddie Mac and Fannie Mae. This policy corresponded with a dramatic increase in housing prices, a building boom which produced an oversupply, and a subsequent collapse which played a major contributing factor in the current recession.

You'd think that such an experience would chasten government officials, but you'd be wrong according to today's New York Times:

Despite extensive government intervention in the housing market, some policy makers at the Federal Reserve are worried that even more might need to be done.

Some people never learn.

Update: Related thoughts from Thomas Firey.