Perhaps the most trivial problem associated with the sub-prime mortgage meltdown is that it's given renewed prominence to a series of issues about which I know nothing. That said, The Nation's view on this seems wildly overblown:
The dismantling of financial regulation, likewise, did not begin with Bush I or II or even Ronald Reagan. It began in the late 1970s, when Democrats were in power. Are the Dems prepared to address their big mistakes and begin the hard task of re-regulating the banking and financial systems to protect the people from the familiar spectacles of outrageous gouging and unpunished crimes of fraud?
Something much, much, much worse than what's happened over the past couple of weeks would need to happen before I found it plausible that comprehensively rolling back three decades of financial deregulation is the appropriate policy response here. Tweak something or other? Sure. It seems to me, though, that the main thing is to try to ensure that whatever bailing out and whatnot happens is designed to minimize losses for middle class and working people rather than to minimize loss for millionaire investors and traders. It's not clear to me that there's any regulatory fix at all for the fact that asset bubbles happen sometimes.