Northern Rock mortgage lender

I'm really scratching my head here, the initial setup for the big sub-prime crash was the orders of the US government that banks loan out more money. Supposedly this was to allow those unable to buy a house to get on the property ladder and thus (somehow) stimulate the economy. This in turn led to banks lending out money to people who couldn't afford it, creating 100% plus mortgages and property prices increasing at silly rates (as money was being loaned out there was no requirement for property prices to fall to a level that people could maintain, likewise as property prices continued to rise, you were more likely to get a loan even if you looked likely to default as the future price of your property would cover that cost) and then packaging up said mortgages for sale en masse to others.

So what does our Chancellor do? He orders Northern Rock to expand their lending to make up for the fact the other banks have just hoarded our 'loans', to do this they're going to offer out mortgages at higher percentages then the others and all to prevent the fall of house prices and lead to negative equity; and all at a time that nobody wants to stick their moeny in a savings account. Wow these people really do have short memories don't they.

Oh wait of course this time it'll all be different because we've much stronger financial regulations in place and the government has direct control over things... snort.