“What was the ‘implicit guarantee’ that Countrywide thought it had?” Countrywide wasn’t systemically important and its failure wasn’t the cause of the crisis, but since you asked… Countrywide was planning on shifting its risky mortgages to Fannie and Freddie. There is a reason why Angelo Mozillo spread favors around to politicians and Fannie executives. It is a stranger-than-fiction development that one of those recipients of Countrywide favors (Chris Dodd) ended up as one of the authors of the most recent financial regulation bill.

“the bubble was already tremendously inflated by 2005″ You can have an asset bubble without risking grid locking the banking system (1987.)

“before Fannie or Freddie even got into the act”

According to the NYT, Fannie’s assets were nearing one trillion dollars by 2003.

http://www.nytimes.com/2003/08/07/business/fannie-mae-s-loss-risk-is-larger-computer-models-show.html

Now while these don’t reflect especially well on the dominant Democratic narrative of the financial crisis, they also aren’t the main causes of the crisis.

What was the ‘implicit guarantee’ that Countrywide thought it had? Funny, it didn’t seem to have one. Any implicit guarantees for the kids working in ‘boiler rooms’ making phone calls to small lenders because Goldman was hot to issue more CDOs? There was a nice interview with one such kid on Planet Money (I think) in 2007, shortly before the stuff really hit the fan. Google “big pile of money”. He made $750K in one year, right out of college, as a middle-man in the MBS *market*. We need more such young entrepreneurs, clearly, and Rubio is just the man to nurture them.

FACT: the bubble was already tremendously inflated by 2005 (see the 100-year Case-Shiller chart; you’re a historian, right?) before Fannie or Freddie even got into the act; prices were already higher in inflation-adjusted terms then than they had been in 100 years.

http://www.nationalaffairs.com/publications/detail/too-big-not-to-fail

http://www.nationalaffairs.com/publications/detail/curbing-risk-on-wall-street

“at least some of us out there are worried that another 8-12 years of center-right rule will bring about something similar.”

Are you afraid of the unintended consequences of financial regulations that were signed by a Democratic president and supported by the current Democratic leaders in Congress? Me too.

http://en.wikipedia.org/wiki/Gramm-Leach-Bliley_Act#Controversy

http://www.govtrack.us/congress/votes/106-1999/s354

http://clerk.house.gov/evs/1999/roll570.xml

Though in all seriousness Republicans need to offer something real and well thought out on this issue.

To me, the GOP needs to become the anti-DC party, but I’m not sure how to do that rhetorically effectively at this point. The current MSM is so overtly in the tank for the Dems that the GOP is pretty hamstrung. Clearly they need to go around them–do local media heavily would be my suggestion. Also open events on college campuses. Both of these require individuals who are smart and quick on their feet, two characteristics that our political system isn’t built to reward at this point.

One quick policy suggestion that I don’t see referred to much is to move to make student loan debt dischargable in bankruptcy. It might have electoral benefits, but it’s just the right thing to do. A clever twist to this is the Glenn Reynolds suggestion to make universities cosigners on all college loans–this would put them on the hook for the “worthiness” of their tuition in a direct way.