Did you read it? It references Joe Stiglitz's and Peter Orszag's advisory from around 2002:
“the risk to the government from a potential default on GSE debt is effectively zero”
“the expected cost to the government of providing an explicit government guarantee on $1 trillion in GSE debt is just $2 million"
Yes, how silly of government to have taken on such a monster risk!
Clearly they were led to expect rational behavior from those entrusted to run the system (who are paid huge $ for their assumed competence) and clearly they didn't get it.
You need to decide whether you want more or less government "interference" in markets. If the market can't be trusted to behave rationally, that's a recipe for government swarming all over it. If the market can be expected to behave rationally without government "interference," you can't blame government when those entrusted to run the market set themselves and everybody else on fire. You can't have it both ways.
"... They ne'er cared for us
yet: suffer us to famish, and their store-houses
crammed with grain; make edicts for usury, to
support usurers; repeal daily any wholesome act
established against the rich, and provide more
piercing statutes daily, to chain up and restrain
the poor. If the wars eat us not up, they will; and
there's all the love they bear us."
-- Shakespeare: Coriolanus, Act 1, scene 1
