We agree, but only barely.

I am thoroughly enjoying this, so without further ado (And with limited quoting):

Let’s be clear that there are very few people left in this country that are proponents of a complete unregulated capitalist system.

I have heard this from you on several occasions, and I am relieved! In the Anarcho world, however, we tend to debate extremes, economically speaking, the extreme I abhor more than anything is Anarcho-capitalism. And there are more than a few who support it, unfortunately.

If they made large loans to small income families, they would eventually end up eating that loss and the company would fail. THAT serves as the warning to others. It isn’t until government steps in and says that these corrections occurring in a free market are “not acceptable” and start to meddle to control it, that the problems really begin.

That depends on what corrections you are speaking of. I agree with you that handouts to failing companies allows companies to continue poor business practices, and may even contribute to the "too big to fail" phenomenon, however the distinction between a regulation and program needs to be made. The handout, bailout, corporate welfare is not a regulation, it is a program that is offered, but not an obligation. There is no reason to believe that should Fannie and friends fail, another private industry willing to take it's place would not pop up. In fact, they already exist in the credit industry - also known as debt collection agencies that bundle debts turned risk and purchase them from lenders who gave high interest credit cards to 18 year olds, and people with notoriously bad credit. When the collection agency can't recover the debt, they sell it to another one ad naseum, essentially circulating the debt around until someone pays for it.

It should also be pointed out that "low income" doesn't equal "high risk". A family with a $30k income and stellar credit, and no debt asking for a $90k loan and has a 20% down payment is a much lower risk than a person with a $100k income, two Bankruptcies, and is currently defaulting on already existing debts.

A perfect example of this is the difference between the Big Three

We agree on this. (and most of what you mentioned previously)

Greed is no different than any other motivating emotion. It serves as a creating and driving force. It is only when greed is accompanied with rewarding bad or even illegal decisions and actions that it becomes a problem.

Be careful not to confuse greed with ambition. Ambition drives, greed is the obsession for something you've neither earned, nor deserve.

You seem to forget that these people, making bad decisions as to their own finances, taking loans they can’t afford.

In some cases, I'm sure this is true. In most cases, people only want what they can afford, and, rightfully want the best bang for their buck. However, social conditioning, as well as culturally acceptable needs play into the consumer's part in this mess more so than greed. Most low- middle income families I know would love nothing more than to get a decent house, for a reasonable price. The question, then, is who regulates the prices so that this is not feasible? (You answer that next)

You blame the corporate greed, but I put it to you that the real greed rests with the lenders who are taking these loans. If a company is greedy, and makes bad decisions because of it, they should not be rewarded with a bailout either. But without the greedy customer, this problem wouldn’t exist.

This is where we disagree - yes, I agree with the first part, but the last sentence makes little sense to me. Customers do not benefit from high interest loans, and expensive homes. "Greed" would imply that some exorbitant value has been dangled in front of them, a temptation to be snatched up. In the case of the borrower, the homes they desire come at a very high cost - where as the lenders and Realtors are the ones happily skipping to the bank with a big fat check. Agreeing to a high percentage loan for a home may be stupid, but not greedy.

Finally, you discuss how the market was doing well regulated, and how despite unregulated markets it crashed in the late 20’s. Aren’t you forgetting how it did before it crashed? If you care to examine how the US economy grew before the 20’s crash, you will see that it wasn’t exactly stagnant and dismal before that, in fact, 1870 to 1916 US production increased tenfold. That’s a slight 1000% dent in your “unregulated markets are bad” theory. The position of the US as the world leading industrial nation was created in this unregulated market.

I should have made that point more clear, but I ran out of words on my limit. (heh).

The market prior to government intervention did do well, in a bad way. The people who did well did very very well, and the people who did not slid into poverty. Upwards of 60% of the population was in poverty, to be specific. Furthermore, the economic boom pre-Depression actually helped fuel the Depression by inciting speculative lending, and purchasing on the margin.

Even without welfare programs like Fannie and Freddie, certain companies, also known as monopolies, became....."too big to fail"! Telecommunications, radio, and the auto industry, later to be followed by the banking industry and stock market. Without FDIC type insurance, when the banks closed their doors, everyone lost everything they had.

This is not a good economic policy, and this is where regulation really comes in handy.

We agree on a great deal of things - such as making better business choices. We disagree, I think, on regulations such as the CRA, and the definition of what Fannie and Freddie do. Again, they are not regulations, but voluntary programs. Meddlesome as they may seem, the inner workings of it helped to grease the wheels of this economy for a very long time, and, only with small booms and busts to speak of. And the companies who used them also thrived on it, voluntarily.

I'll wait for the second installment to see what else you have to say. I'm impressed so far - no aspirin needed....yet.