Fannie Mae and Freddie Mac Regulation

Charles Calomiris has a WSJ op-ed (with someone else) on Fannie Mae and Freddie Mac's role in the subprime mortgage market and the Republicans' attempt to stop them. The Democrats are squarely to blame, it seems. The op-ed also points out that deregulation has played no role in this crisis. The problem on Wall Street is that we've never regulated investment banks' capital levels, not that we've deregulated them, and that financial innovations have created a need for regulation.