President Bush says Wall Street got drunk. Anyone care to disagree?

I read an article in business week about industrial planning and I saw another article again on a blog about it. http://stockparadise.blogspot.com/2008/07/capitalist-command-economy.html

Could all of this have been avoided with some long term guidance by the government?

And the Federal Reserve got it drunk with a long period of very low, below natural rate interest rates. And the Congress and the President threw GHB in the punch bowl with regulation changes that drove banks to give loans to people with bad credit and low incomes who couldn't pay them back.

@ Sanjay: To a certain extent the current problems were caused by government steering private investment into housing and away from more productive investments. So I guess the question would be, What kind of long-term guidance?

Wrong metaphor. Drunk implies they didn't know what they were doing.

I think it's more like kids (i.e., Wall Street) throwing a party while the parents (i.e., regulators) are away (i.e., regulation requirements being removed).

Like the link I posted said, long term guidance should mean that the government should prevent "foreseeable train wrecks". Things that 5,10,15 years down the road that will pose problems, but there is not enough political will to solve those problems because they are so far down the road. I live in San Jose, CA where house prices are through the roof, and I could have seen this housing crisis coming at least 5 years ago. If there was some sort of a strategic planning commission that reviewed data, and ensured that the economy was on the right long term path, then we could have avoided some of this mess.

The party only happened because of the Fed & below natural rate interest rates.

No Fed, no party.