Credit regulation and the middle class

I've been mentally erring on the side of laissez-faire (yes, I spelled that correctly on the first try) when it comes to the current "credit crisis", swaths of mortgage foreclosure in Northeast Ohio, and the like. After all, I'm a middle-class guy who was skeptical of what mortgage banks claimed I could afford, and settled on a modest house and mortgage terms that I knew I could continue to afford through all but the most catastrophic of personal hypotheticals. (Given my monthly Babies-R-Us bill and continuing ownership of said house, I'd say I've succeeded.) Then again, my strategy only worked because I didn't believe what the mortgage industry claimed, and I suppose I shouldn't expect all consumers to behave so... intelligently?

Elizabeth Warren at Harvard has authored books and articles making the case for more attentive government regulation in credit in this very readable article in the university's magazine. I also recently read her testimony before a congressional committee on similar subjects, which included a straightforwardly-explained comparison of the median class in the 1950s and the present.