The notion that the current “housing crises” is in any way a result of laissez-faire capitalism is utterly ridiculous. Laissez-faire capitalism has never existed, and since the late 19th Century, when America came the closest to laissez-faire capitalism, what has existed in America is a growing welfare and regulatory state, similar to the fascist variety of socialism. This article makes it clear that the current economic problems were caused by the Federal Reserve, which is a government institution, and essentially represents a nationalized, socialist monetary system.
Under laissez-faire capitalism, gold or some other real value would serve as the basis of the money supply, and there would be a competition in money. This competition of money supplies would take the following form: banks and other businesses would issue paper money with a distinct look and color, which would probably be trade-marked, so that no other person or business could rightfully issue currency with a similar look. Their private currency would have to be backed by some “real value”, such as gold, silver, an index fund in the stock market, etc, otherwise nobody would be willing to hold it. Then, if any particular business’ money supply were over-inflated by it, people would sell that money in favor of other private money that was a more stable store of value and medium of exchange. This would be true laissez-faire capitalism in banking and money.