More Evidence That Liberal Ideas (Almost) Never Work

On June 22 of this year I posted an argument concerning our government’s “solutions” to any number of issues. It was with a smug horror that I find that my words were almost prescient.

I argued that America is a wealthy nation. We, as barely four percent of the World’s population produce fully twenty-five percent of the World’s wealth. And I stated that it is this wealth that causes liberals to make us believe that we are greedy or just too self-centered and they must come up with solutions to cure this sinful selfishness.

And so we are now in the midst of the worst financial breakdown in America and on Earth since at least the fiasco of the Carter Administration and quite possibly the Depression of the 1930’s. In the 1930’s, in the throes of the Great Depression, Franklin Delano Roosevelt came up with the “Alphabet Agencies” which expanded the US government exponentially and militarily socialized society. It is felt by many historians and economists that this effort actually lengthened the downturn by as much as 100 per cent. One of the programs introduced during FDR’s tenure in 1938 was the Federal National Mortgage Association, or “Fannie Mae.” When Richard Nixon took over from Johnson’s Great Society, his populist conversion led to the Federal Home Loan Mortgage Corporation, or Freddie Mac in 1970.

I previously said that I understand that all these programs are based on the best of intentions, and that I also know to that the Road to Hell is paved with those same intentions. And so it is with Fannie and Freddie. Our benevolent government decided, with some real evidence, that homeowners are more stable, less likely to commit crime, and are therefore more responsible and better citizens. So, the US Government jumped into the mortgage business in order to boost the ability of the average American to own a home, and then be more stable, become responsible, and raise a family. This would all, then, contribute to a stronger, more stable nation. It seems all so logical.

So, during the Clinton administration, Fannie, Freddie, and the private banks and institutions that are dependent on them, were ordered to ease their lending requirements and give loans to nearly anyone who wanted to buy a home. Great idea! Except, there were no real rules to ensure that EVERYONE was going to make the proper decision. In fact, the financial institutions were threatened by the Clinton Justice Department with criminal charges if they refused to go along!

Nevertheless, it soon dawned on managers of banks and other lenders that huge money could be made by lending to people who were traditionally high risk, AND THAT THE LOANS WOULD BE GUARANTEED BY THE AMERICAN TAXPAYER! No muss, no fuss, and it was ALL LEGAL! Why? Because Congress, whose job it is to control and manage these agencies were more interested in catering to their constituencies than in the dangers of a potential global financial meltdown. Warned of the potential problems repeatedly over the past decade, Congressional committee chairs Christopher Todd and Barney Franks refused to increase oversight or tighten regulations.

How were they warned? Shoot, even the liberal New York Times in an article published in 1999 stated as much.

But, the government decided some social engineering was a good thing, and that we could MAKE people responsible if they owned their own home. This same entity also thought that welfare was a great idea. That is why today a black child is less likely to be raised in a two-parent household than he was during Slavery.
The point of all this? Simply that the government is incapable of properly and effectively performing those things that the free market does so well. When the government puts its hand in where it should never have ever been, it brings catastrophic returns to our nation. In this case, it also brought it to the World.

Don’t be fooled. Capitalism didn’t cause this catastrophe. It was the intrusion of government into the mortgage market that was the prime reason for this melt-down. Capitalism, as it is wont to do, took advantage of government foolishness and a small group of people got rich. And you and I are left holding the bag. Christopher Todd, Barney Franks, John McCain, Barack Obama, and as far back as Lyndon Johnson and even Franklin Roosevelt, and a host of others are the real culprits in this. These are the people that WE elected to run our government.

And, so, we too are to blame.