HOUSING THEORY

     When broken down, the solution to the housing crisis of today can really be summed up into the degree of which the government should regulate the housing market. 
     On one side, there are many that believe the government should leave the housing market alone for a while. This theory, mainly held by Republicans, and currently, many Democrats, goes back to the ideals of French merchants when asked what the government should do to help them. They simply said "laissez-faire," which means "let us do," or "leave us be." This idea of a free government hand on the economy was also further explained by notable economists, George Whatley and Adam Smith. 
     On the other side, there is the theory that government should have a strong hand and influence on the economy and its markets and prices. This theory runs back to the idea of a command economy, which is when government controls the economy, and also socialism, which is an economic theory that says all means of production and businesses are publicly owned. While these ideas are more extreme, it is the backing to many of the ideas of mostly Democrats and Liberals. An example of this is the bailout of 2009. Because of the downward spiraling financial houses, the government intervened and gave bailouts to large financial institutions that needed them. 
     Just to clarify, by no means am I trying to say that all Republicans believe in free market economies and laissez-faire or that all Democrats believe government should take a stronger role in the economy. However, after dissecting the issue and the theories on what should be done, the two basic theories that surround the housing crisis really do come down to two polarizing ends of the spectrum. While the bailout of 2009 was an example of government intervention, the current policies surrounding the housing crisis are very much laissez-faire. The government is trying to walk the tightrope between having a hand in the economy, and letting it recover on its own.