If, indeed, we could identify one culprit, then we might imagine a "silver bullet" that could fix the problem. But, as Treasury Secretary Henry Paulson pointed out, in announcing the broad reforms suggested by the President's Working Group, no such "silver bullet" exists.
To go back to the psychotic living in the castle in the sky, the task today must be to restore a sense of reality to the patient rather than moving in with him. Unfortunately, what many of our friends from the Democratic Party are proposing is closer to the latter.
A return to reality means bolstering the integrity of law and contracts and the restoration of a sense of personal responsibility on the part of all market participants. A healthy housing market depends on this. But so does our whole free society.
Proposals such as allowing bankruptcy judges to rewrite mortgage terms contributes to chaotic fundamentals as opposed to remedying this.
Similarly, massive government intervention, whether it be through moratoriums on foreclosures and interest-rate freezes, like Democratic presidential contender Hillary Rodham Clinton wants, or government takeovers and refinancing of loans, closer to what we're hearing from her rival for the nomination, Barack Obama, creates new distortions and free-lunch illusions.
It may sound nice for the government to hold up prices and fend off foreclosures. But where is the justice for those who sat this out?
It is true that only about half of black families own their homes, compared to three-quarters of white families. A drop in home prices to a new low could put homeownership within reach for those who could not afford it previously. Must the innocent and responsible pay the price for those who decided to climb out on a limb?
Let's not forget now that our resilient and prosperous free society is built on law and personal responsibility. Pain is a normal part of life. It tells us something is wrong. What is critical is that we get the right message about the nature of the problem.
Correction from last week: The statistic that 26 percent of Americans are evangelical Christians comes from the Pew Forum on Religion and Public Life and not the Pew Foundation.
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