Peter Wallison's Housing Bubble

Peter Wallison, who was White House Counsel under President Reagan and has long been a fellow at the American Enterprise Institute, told NYT readers today that the housing bubble is back. Wallison is right to be concerned about the return of a bubble, as I have pointed out elsewhere, but his account of the last bubble and the risks of a new one are strangely off the mark.

Wallison wants to blame the bubble on government policy of promoting homeownership. There certainly has been a problem of...