The administration harbored political motivations as well. No one wants to head into the 2008 elections with thousands of home foreclosures roiling the economy, which would hand the Democrats a deadly issue to use against the Republicans.

As for the larger economy in all of this subprime-credit turmoil, well, it is still growing, despite forecasts of its decline. U.S. manufacturing expanded last month as a result of increased orders. The Institute for Supply Management, an industry trade group, said its manufacturing index was at 50.8 last month. An index below 50 points suggests contraction.

"Manufacturing continued to grow during November, a trend that is now in its 10th month," ISM reported.

A survey of the Business Roundtable's top corporate executives found that they expected sales, capital investment and job hiring to remain at current levels and even improve over the coming months.

Other signs suggest that the economy is weathering its housing troubles. The Labor Department said that worker productivity continued to rise, thus lowering business unit costs, which should help lower inflation, which should help the Fed to cut interest rates again.

The news on the jobs front was encouraging, too. A report from ADP Employer Services, which tracks hiring, said businesses last month added 189,000 jobs to their payrolls, triple the number forecast by economists.

Meantime, oil prices have fallen, the stock market was sending signals of a year-end rally, U.S. exports were growing at a healthy pace and fixed-mortgage rates were dropping, a sign that homebuyers will begin to come back to the market next year.

The central economic signs, contrary to the doom and gloomers, are fundamentally sound. As financier J.P. Morgan once said, "Anyone who bets against the American economy will lose."