The U.S. government's financial policies have been flawed, leading to fragility in the financial system. The banking crises of the 1980s were worsened by government subsidies for real estate finance, causing instability in real estate markets and financial institutions. These subsidies included special advantages for thrifts, subsidized lending, rules masking losses, and risky lending policies. The crises were not solely due to economic shocks but were amplified by these policies.