Wealth of Nations - Curing the Subprime Sickness

by Clive Crook

Sat. Dec. 8, 2007


If ever there was a case of "an ounce of prevention is worth a pound of cure," the subprime mortgage mess is it. The Treasury Department, late to the issue, is struggling to contain an increasingly scary problem. All of its efforts so far -- and the government, however reluctantly, may yet be drawn more deeply into the crisis -- are second-best and have drawbacks. Big costs for taxpayers are a distinct possibility. Many families will end up losing their homes, and the soundness of the financial system remains in question. If the economy does slide into recession, as many economists fear, the subprime fiasco will be substantially to blame. And yet the whole thing might have been averted if some simple fixes had been made in good time.

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