NEW YORK CITY—In his most recent post, Ethan Penner asks what could have been done about the 2008 housing crisis, and tries to figure out if the underlying principles were rotten, or based on solid judgment.

Penner first discusses the various fallacies involved with the market breakdown: that the richest in the population are the primary actors (rather, it's pension and sovereign wealth funds), that a money manager should invest in what is best for the world (rather, they are entrusted with the best returns for their investors), and that government has no role in a solution to the next crisis (in fact, the basic job of government is to work towards an interpretation of the public good over personal gain).

Penner weighs how the economic pressures on individuals versus the needs of the public influenced the crisis, and analyzes the actions and moves by the politician at the nexus of the housing sector against what could have been done: Barney Frank.