There is much known about the near-collapse of the housing and financial markets, and the destruction that followed for a number of large banks, such as Lehman Brothers. The more disturbing story, though, is not how America's financial institutions nearly brought us to a major depression, but how in the midst of the federal government's efforts to stabilize the financial industry, the people were convinced that this all began and ended under the administration of George W. Bush, and his efforts to create a free and open market in order to work our way toward a pro-business environment, when, in fact, the largest movement toward deregulation occurred under the Presidency of Clinton.

President Clinton's efforts to create affordable housing for buyers with easy lending for banks to engage in were a continuation of the work of President Carter, who also believed that owning a home was a right rather than a privilege. The devastating results were that houses were being foreclosed on, small businesses suffered, and many of us were left to pick up the tab.

In 1999, President Clinton signed into law the Gramm-Leach-Biley Act, which repealed the Glass-Steagall Act of 1933. The Glass-Steagal Act placed barriers up so that banks could not lend recklessly as they had in the events that led up to the depression. It is one of the reasons that many people can borrow money to purchase a rental property, but not to speculate in the stock market. The results were that the availability of loans greatly increased, home buying followed suit because homeowners trusted the advice of the mortgage lenders, and the demand for homes increased, leading to a market flooded with buyers as well new construction to match, and the market became inflated as the supply was falling short. By 2006, home prices hit a peak and were beginning to fall drastically as the bubble burst, hitting areas like Long Island, New York, Las Vegas, Nevada, and much of Florida the hardest.

As the crisis went into overdrive the Federal Reserve, led by Ben Bernanke, continued to lower mortgage interest rates to keep borrowing cheap so as not to shock the market, which would have led to more layoffs in the financial sector. It was not the cure-all, but it was a medicine that allowed the economy to wean off of the drug it had been addicted to: irresponsible borrowing and lending. Construction continued or resumed, keeping many laborers, contractors, and architects employed, and lending stayed steady rather than dropping sharply and working against those who use credit as a means of operating from day-to-day, such as General Electric and other businesses that employ thousands of people.

Two years later, the inevitable happened. The unworthy loans were coming due and found to be bad. The banks attempted to apply a salve of sorts in bundling them and working to sell them off so as to create room on their books, but the avalanche had already begun a decade before with the Gramm-Leach-Biley Act, and the momentum was too great to be stopped.

The Secretary of the Treasury, Henry Paulson, realized that while the banks did deserve to fail as institutions, the American people who had their pensions tied up in them did not deserve to suffer such losses that often come as a result of idealism put into action. What came next was a $700 billion program called the Trouble Assets Relief Plan (TARP). It came to the rescue of these banks so that they could be saved from themselves and the policies they followed, but, more importantly, it prevented a major depression as the economy screeched short of it at the point of a terrible recession.

Though the legislation and the work of government created stipulations for the restructuring of the financial industry, there was a failure to put back in place the regulations that are needed to keep such complex economies of scale in place as the Bush administration changed hands and went back to continue the legacies of Presidents Carter and Clinton that supported corporatism in the name of allowing average people more opportunities in terms of home ownership, regardless of the realities being faced.

The conclusion we need to come to is that the blame cannot be placed solely on the predatory lenders or borrowers, but on the guidance both were given from the government that first deregulated the housing market then failed to assist struggling homeowners and businesses. The slack, in both cases, was left to be picked up by the following administrations, whose leadership can only extend so far in an environment that is only designed to make incremental changes. And just like a large warship heading for an unexpected shore, steering to avoid a collision must be done well in advance, and is not always possible.

.(JavaScript must be enabled to view this email address) is a 23 years old mortgage and finance writer and head editor of MortgageLoan.com.