Fool me once, Shame on me. Fool me twice, Shame on.. me?

I was reading an article in the Times today, about how Wall Street was busy making money off of mortgages again. This time the gambit involves packaging distressed sales and refinancing them into government insured mortgages, then taking that money out immediately - serving to shift all of the backside risk onto the government.

Ostensibly, this article serves as yet another example of Wall Street behaving badly. But I ask - exactly how does any of this work without the implicit acceptance of the government agencies that allow, no, perpetuate this kind of behavior?

The government has no business investing our tax money into the housing market. It has no business guaranteeing mortgages and no business monopolizing the housing finance market, whether through fannie/freddie or through the FHA/VHA. The housing market is dominated by the federal government and yet it claims no responsibility for what happened.

Through its actions, it is as complicit as the very banks that helped to cause the housing meltdown. The only difference that I see is that those banks are vilified and yet the government still holds itself up the solution.