Global financial markets have recently been a roller coaster of sickening spins and spirals. This harrowing ride will continue - and no one really knows where it will end. Many certainly fear what the answer might be. Meanwhile, the US is firefighting by injecting staggering sums into money markets in a frenzied effort to maintain global capital markets in working order. Each sortie buoys stock prices momentarily and is greeted by hallelujahs from global financiers and government ministers.
Then a new round of failures and near misses begins. More hallowed US institutions enter ignominy - Fannie Mae, Freddie Mac, Lehman Brothers, AIG, Merrill Lynch, Morgan Stanley.
Moreover, the turmoil is hammering world capital markets and economies. The history making global economic machine that lifted hundreds of millions out of poverty is shuddering and slowing.
None of it makes sense. The United States is not in recession - at least not yet. No one argues that the US housing market has suffered setbacks. But even a cursory examination of the evidence raises the question: how can housing losses explain a global meltdown of capital markets?
Why is the global economy suffering so much? The US economy has been growing. Unemployment was, and still is, at acceptable levels. And the US housing market was, and still is, largely sound.
Moreover, since before the second world war, Washington has actively promoted homeownership. This was a conscious, broadly accepted social policy aimed primarily at low- and middle-income people - precisely those who, in many cases, would qualify only for subprime loans.