John McManus Photo: Katherine Lambert The Fed, the Treasury, the Administration, the Federal Deposit Insurance Corp., the GSEs, TARP, economic stimulus, loan modifications, foreclosure moratoriums… the list of Washington, D.C.-based agencies and interests, programs and procedures goes on, and on, and on.

As economic and housing conditions get more menacing, interventions and initiatives proliferate. The worse it gets, the more they do. The more they do, the worse it gets.

The more earnest Ben, Henry, Sheila, Nancy, Christopher, Barney, James, and company become, the less confident everybody else becomes. Confidence is made of two equal measures, one of assured conviction and one of healthy greed.

Who'd ‘a thunk it? Your magazine about an industry and business community whose work touches and directly contributes one of every six GDP dollars suddenly turning its lens on who's doing what to whom on Capitol Hill! Why, we've even got a piece this issue on FDIC chair Sheila Bair's valorous but struggling efforts to stop foreclosures—a critical link in the chain of events needed to turn this destructive tide toward recovery!

If all this earnest meddling, easing, and tightening stopped—we begin to surmise, perhaps naively—maybe things would get as bad as they possibly can get, and that's hard even to imagine. But then we'd be able to say the manipulation and machinations are not needed.

We haven't departed our free-market senses entirely, though. Our “Main Street Mojo” analysis focuses on the necessary re-emergence of old-school ways of raising capital, with sheer sweat equity among local investors.

One way of looking at what brought us to this historic moment is this: Society, business, government, and individuals bet on expanding the universe of homeowners beyond the bounds that had previously been drawn. Now, we're paying the price of that bet. What better instant to have Eric Belsky, executive director of Harvard University's Joint Center for Housing Studies, back in our pages with a perspective on the consequences and solutions of our missteps.

Belsky and his JCHS colleague Nicolas Retsinas have just come out with a book, Borrowing to Live: Consumer and Mortgage Credit Revisited. It's your assignment for any off days between now and the 44th Super Bowl, Feb. 7 in Tampa.

For home builders, the resolution about how much we'll pay–and over what timeline–will determine when there's actually a return to high volume business. Maybe 2010; maybe as long as two years later. After all, we need jobs, consumer confidence, consumer spending, earnings, capital spending, and demand for materials all to begin recovering for demand for new homes to act normally.

From what's occurred, we learned this: We need better ways to quantify risk beyond the actuarial models that formed the basis for risk assessment in the days when 20 percent down and 30-something percent of household income maximums were the bedrock of home mortgage approvals.