Dear: government must stabilize home prices

On the way into work, heard Investment Board Director Joe Dear on KUOW, talking about the economy and Wall Street. Interesting stuff.

"It's important for our government to take steps to keep the crisis from getting worse," he said. Specifically, Dear said free-market orthodoxy had created the credit crisis, and what is most important now is for the federal government to stabilize house prices, even if that means creating a financial institution to do so.

Moreover, he said, there was a lack of will among regulators to use the limited powers they do have to control the market. And as Dear has said before, he doesn't like CEOs reaping millions just to walk out the door.

"Leverage is at the heart of this. Too. Much. Debt. The financial services industry and consumers especially," Dear said.

"This is not magic. You can't lend money to people who can't pay it back."

You can read our story about the state of the state’s $78-billion investment fund here.