President Obama’s speech on housing policy in Arizona late yesterday didn’t make a lot of news, although it was another installment in his series of Big Economic Speeches. Yes, he did call for the gradual demise of Fannie Mae and Freddie Mac, which addresses one element of the housing policy conundrum: the exposure of taxpayers to bad bets on the housing market. But as Matt Yglesias unhappily notes, Obama spoke in terms of repairing the old system rather than creating anything really new:

[T]he administration isn’t pushing for any major rethink of housing policy in the wake of the crisis. The idea that the government should encourage people to make leveraged investments in owner-occupied housing and that these investments should be the cornerstone of middle-class savings is alive and well with us. Concurrently with that conceptual framework came a policy framework for the future of Fannie Mae and Freddie Mac that hews closely to a bill that’s been introduced in the Senate by Bob Corker and Mark Warner. As befits a bipartisan bill this is a very moderate piece of legislation. It’s a small-c conservative bill that tries to address some of the problems with the old Fannie/Freddie system but tries to achieve essentially the same goal—have the government intervene in housing finance to promote 30-year fixed rate mortgages for owner occupied housing as the normative paradigm in American life, while gesturing at a handful of ancillary social goals.

You can only imagine, however, what sort of economic and political instability Obama might have encouraged had he Gone Big on housing policy. Like it or not, owner-occupied housing has been and continues to be the primary method of middle-class wealth accumulation in this country. Replacing it will require, well, finding a replacement, at a time when alternative schemes–e.g., the tarnished dream of individually controlled retirement savings instruments–aren’t exactly working out well. And the interests that would be threatened by any major shift away from federal subsidies for homeownership are immensely powerful.

Still, I’m sympathetic to Yglesias’ complaint:

[I]t’s a bit strange to come out of a massive crisis with its origins in the housing sector and the cult of homeownership and come out of it with a reform agenda that very much doubles down on that very same cult.

Back in the early days of the Obama administration, an old quote usually attributed to Winston Churchill was very popular in Democratic circles: “Never let a good crisis go to waste.” When it comes to housing policy, that’s exactly what we’ve done.

Ed Kilgore

Ed Kilgore is a political columnist for New York and managing editor at the Democratic Strategist website. He was a contributing writer at the Washington Monthly from January 2012 until November 2015, and was the principal contributor to the Political Animal blog.