Tracy Alloway finds a reportthat one of TARP’s goals is propping up house prices

I remember 1980, when holding down consumer energy prices was the main goal of energy policy. Then Ronald Reagan was elected President, and one of the first things he did was deregulate energy prices. Before he did so, the prospect seemed horrifying. After he did it, energy markets worked much better, and prices eventually came down.

I feel the same way about U.S. housing policy today. Policy makers are horrified by the the thought of extricating the government from all of its efforts to keep people in houses and prop up house prices. Yet I believe that a Reagan-esque termination of government intervention would be a tonic for the economy and the housing market.