Posted on 09/22/2008 7:27:53 AM PDT by SE Mom
Stop This Crazy Thing [John Hood]
I second Yuval’s point. Regarding the bailout/government takeover bill, the political class in DC appears to be out of its gourd.
Kevin Hassett of AEI has just written a must-read commentary on the Wall Street mess for Bloomberg (via the Web Briefing). It's an excellent response to the past week or so of preposterous analysis in the media that blames the mortgage crisis on the free market, despite its origins in the massive government manipulation of the mortgage market. Hassett explains:
Enough cards on this table have been turned over that the story is now clear. The economic history books will describe this episode in simple and understandable terms: Fannie Mae and Freddie Mac exploded, and many bystanders were injured in the blast, some fatally.
Fannie and Freddie did this by becoming a key enabler of the mortgage crisis. They fueled Wall Street's efforts to securitize subprime loans by becoming the primary customer of all AAA-rated subprime-mortgage pools. In addition, they held an enormous portfolio of mortgages themselves.
In the times that Fannie and Freddie couldn't make the market, they became the market. Over the years, it added up to an enormous obligation. As of last June, Fannie alone owned or guaranteed more than $388 billion in high-risk mortgage investments. Their large presence created an environment within which even mortgage-backed securities assembled by others could find a ready home.
The problem was that the trillions of dollars in play were only low-risk investments if real estate prices continued to rise. Once they began to fall, the entire house of cards came down with them.
Efforts to rein in the government-backed mortgage companies faltered in 2005. That is most unfortunate. Washington has now taken over both monstrosities, and it would be most fortunate if they were eventually to be whittled down and sold off. As for this week's mania, I find myself hoping that Nancy Pelosi, Mike Pence, Ron Paul — somebody — will, in George Jetson's words, “Stop this crazy thing!”
09/22 09:29 AM
Link to the Bloomberg piece by Kevin Hassett:
http://www.bloomberg.com/apps/news?pid=20601039&refer=columnist_hassett&sid=aSKSoiNbnQY0
“But the bill didn’t become law, for a simple reason: Democrats opposed it on a party-line vote in the committee, signaling that this would be a partisan issue. Republicans, tied in knots by the tight Democratic opposition, couldn’t even get the Senate to vote on the matter.
That such a reckless political stand could have been taken by the Democrats was obscene even then. Wallison wrote at the time: ``It is a classic case of socializing the risk while privatizing the profit. The Democrats and the few Republicans who oppose portfolio limitations could not possibly do so if their constituents understood what they were doing.’’
Finally...someone is writing about this in the MSM!! Thanks so much for the ping!
I know- it’s unbelievable that NO ONE in the MSM is talking about it.
Well...it’s really not unbelievable, is it?
“Well...it’s really not unbelievable, is it?”
Sadly, no, it’s not.
They have circled the wagons around Obama’s ties to marxists, terrorists,convicted criminals, Fannie Mae/Freddie Mac, AIG,Lehman Brothers,Goldman Sacs,HArold Raines, Johnson,Ponzi Penny, astroturfing Axelrod, dirty campaign tricksters, Reverend Wright et al and countless others, all in order to keep it out of view of the vast majority of the American people!
I am sure I left someone out of the long list...but you get the point. It’s truly astonishing!
Good read bump!
RUSH IS ON THE HASSET PIECE NOW!
Sounds like he is fixing to go into Obama’s ties to the FMFM et al too!!
YIPPIE!!
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