I am not a great believer in the governing abilities of our former President, George W. Bush, but I do think his concept of having wide swaths of Americans participate in an ownership society was a laudable goal. The concept included large numbers of Americans riding a wave of prosperity engendered through ownership in appreciating assets such as homes, businesses and retirement accounts. This was viewed as a ticket toward upward mobility. At least that was the theory.

The ownership society might have succeeded if human greed had not intervened. And maybe it will always be that way. Greed certainly took over as the managers, the caretakers of our stock market wealth, often leveraged their (and therefore our) investments in what turned out to be little more than a (not-so-well) calculated gamble. When assets prices eventually fell as the hoped for economic society unwound, and leverage backfired, their investors lost agonizing amounts of money.
 
And on the opposing side of human nature, fear may cause our leaders to overcompensate in order to resolve serious economic crisis, causing future problems. For example, after the stock market bubble burst in March 2000, Alan Greenspan brought interest rates down to one percent by 2003. By doing so, Greenspan probably laid the foundation for the following asset bubble: the unprecedented appreciation of home values that persisted until late 2007.

Current Fed Chairman Ben Bernanke, in the framework of his study of the 1930's deflation, may be similarly laying the groundwork now for the next bubble: a great inflation in the coming years. The Fed's theoretically infinite balance sheet stands at two trillion dollars as part of an effort to avoid the worst case scenario of another Great Depression. Bernanke apparently intends to contain future inflation. We shall see.
 
The credit and general economic crisis we experience now is related to the failure of the ownership society. Instead of sharply increasing the home ownership rate (also a goal of the Clinton administration), many homeowners found themselves "under water" and have been forced out of their homes due to a collapse of the great housing bubble. Some innocent homeowners were simply taken in by banks and mortgage companies who sold mortgages with indefensible terms of payment. Others were hoping for a free lunch.
 
Investors whose dream may have been to parlay their wealth by reselling homes at ever increasing prices may have been impaled as the bubble burst. Wall Street securitized residential mortgages, packaging riskier subprime loans with higher grade mortgages in order to gain the coveted triple A rating from the ratings agencies. And it worked, for a while, until the housing market did not grow to the sky, as predicted.
 
Many citizens, investors, institutions and countries across the globe were hobbled by losses as a result of this failure. I hope that the lesson will be learned that fear and greed in human nature cannot be underestimated and that democratic societies may be vulnerable to similar crises in the future. Building an ownership society still remains a lofty goal, at least in my opinion. It is my hope that we can move out of this crisis without turning away from the strengths of our economic system that have sustained America for so long.