Kai Ryssdal: It's not really a question of what happened to cause the financial crisis anymore. A housing crash, irresponsible lending and borrowing, egregious violations of common sense and sound financial practices. Another way to put it might be "reckless endangerment," which as it happens is the title of New York Times reporter Gretchen Morgenson's new book on the crisis. Good to have you back.

Gretchen Morgenson: Anytime.

Ryssdal: There are, of course, villains to go around and you get to them in turn in the course of this book. But you spend a lot of time talking about housing and real estate. And more specifically the drive that we had in this country in the late '90s to get more Americans to own their own homes.

Morgenson: Yes. That was, I think, the door that was opened to the kinds of practices that really contributed to the losses that we're now counting and the crisis that we're still living through. And what we argue in the book is that this American Dream was really a way for a lot of companies, a lot of participants, to make a tremendous amount of money for themselves while putting the American Dreamers -- the people who wanted to own the homes -- at peril.

Ryssdal: Your main character here is a guy by the name Jim Johnson, the head of Fannie Mae, the big government mortgage company. Lay out his role and that company's role in how we got to where we are today.

Morgenson: OK. So back in the early '90s, we had just been through another financial crisis and it involved S&L's, savings and loan associations. There was a bit of soul searching that was going on in Congress at the time that we were cleaning up the S&L crisis that really sort of went to the point of, gosh, could such a crisis happen at Fannie Mae and Freddie Mac? So they wrote some new legislation designed to forestall any kind of a crisis at the companies. Well, the executive in charge of Fannie Mae at the time was Jim Johnson. And he was very, very assertive about making sure that the capital requirements that were set in the legislation would be low so that the company would earn more money. And that Fannie Mae got everything that it wanted in the legislation.

Ryssdal: So here's the rear-view mirror question though: Why did regulators look the other way? Why did consumers get into these mortgages? I mean, it all seems so dunderheaded, you know?

Morgenson: I attribute the regulatory failures to, in some cases, regulatory capture -- in which the regulators are so close to the entities they are charged with overseeing that they begin to have the same mindset. They don't want to be an adversary.

Ryssdal: As you know, the Dodd-Frank financial reform bill says nothing at all about Fannie Mae and Freddie Mac. Congress can't agree what to do about them. The market is up in the air as to what taking them out of the mortgage will mean for rates and home ownership. What are we supposed to do now?

Morgenson: I think if we've learned anything about this crisis, it is that you really have to think twice about having the government back any kind of a private enterprise. Fannie Mae really got it down perfectly. They benefited themselves all the while wrapping themselves in the American flag and saying that they were really benefiting borrowers. Now remember that throughout this period, from the early '90s all the way through the end when the taxpayers took over Fannie Mae and Freddie Mac, all of the executives, many of the policymakers, many of the lawmakers that supported the companies maintained that the taxpayer would never have to pay a dime to cover them. And of course, we know how that turned out.

Ryssdal: Gretchen Morgenson is a reporter in the business section of the New York Times. She's a columnist there as well. And she's the author of a new book with Joshua Rosner called Reckless Endangerment about the financial crisis. Gretchen, thanks a lot.

Morgenson: You're welcome.