Actually the majority of the burst housing bubble and corresponding financial services failure was not caused by anything congress or the president did during Bush's tenure. Since the core problem was the creation and sale of CDS by combination investment/commercial banks, the real culprit was the repeal of the Glass-Steagull Act by the Gramm–Leach–Bliley Act in 1999. This was a predominantly Republican endeavor although Clinton signed it into law. There was also a problem with accurate risk evaluation by the ratings companies.
"The Gramm-Leach-Bliley Act (GLBA), also known as the Financial Services Modernization Act of 1999, (Pub.L. 106-102, 113 Stat. 1338, enacted November 12, 1999) is an act of the 106th United States Congress (1999-2001) signed into law by President William J. Clinton which repealed part of the Glass-Steagall Act of 1933, opening up the market among banking companies, securities companies and insurance companies. The Glass-Steagall Act prohibited any one institution from acting as any combination of an investment bank, a commercial bank, and an insurance company.
The Gramm-Leach-Bliley Act allowed commercial banks, investment banks, securities firms, and insurance companies to consolidate.
...
Respective versions of the legislation were introduced in the U.S. Senate by Phil Gramm (Republican of Texas) and in the U.S. House of Representatives by Jim Leach (R-Iowa). The third lawmaker associated with the bill was Rep. Thomas J. Bliley, Jr. (R-Virginia), Chairman of the House Commerce Committee from 1995 to 2001.
The House passed its version of the Financial Services Act of 1999 on 1 July 1999 by a bipartisan vote of 343-86 (|Republicans 205–16; Democrats 138–69; Independent/Socialist 0–1), two months after the Senate had already passed its version of the bill on May 6th by a much-narrower 54–44 vote along basically-partisan lines (53 Republicans and one Democrat in favor; 44 Democrats opposed)."
The current reform bill ought to reinstate the Glass-Steagull Act.
