Wednesday, November 5, 2008

Who To Really Blame

Originally From:
Letters from Readers, Florida Times-Union, Monday, October 13 edition; submitted by T Criss.

Financial Crisis: Blame Government Interference

Legislators and bureaucrats have duped the American public again.

This time it is into believing that government is the benefactor and their rescuer, instead of accepting their responsibility for creating the financial crisis we are facing.

Both Republicans and Democrats should have accepted their bipartisan responsibility for dictating that Fannie Mae and Freddie Mac acquire mortgages from lenders that were granted to unqualified borrowers under the equal-opportunity lending guidelines of these quasi-governmental agencies.

These democratization-of-credit rules mandated by Congress ultimately eroded the capital of these entities, with losses caused by the default of such borrowers when the mortgage principal balance exceeded the home values in the current real estate market.

In a free market, lenders would never be foolish enough to loan money to unqualified borrowers they believed could not repay the loan. Surely, no one would purposely lose their own money.

Government interference with sound business practices was promoted by the Fannie Mae and Freddie Mac guarantee that the government would immediately reimburse lenders for loans issued under its guidelines and allow lenders to earn fees for generating such mortgages.

Indeed, we are now deafened by congressional and presidential candidate screams decrying predatory lending practices when, in fact, the ultimate lender was the government through Fannie Mae and Freddie Mac.

Now the same government that created this debacle wants us to believe that it can "rescue" us from the mess it created by taking over management, ownership and $5 trillion of debt of Fannie and Freddie, not to mention, by passing a $700 billion "bailout" bill for other bad, mortgage-related assets.

Since government officials caused this mess through their interference, do they think that citizens are simple enough to believe that increased government involvement will stabilize the marketplace?

If so, we should be insulted that they have the hubris to think that Americans trust them to take care of us in the future. Bailing out bad investments of selected citizenry with taxpayer money is not the place of, nor within the constitutionally enumerated powers of, our republic.

When is enough going to be enough?
I would suggest that all who agree with the above research the source of,and who supported, the "Community Reinvestment Act" which contains the origins and cause of this "crisis."In my mind, not only should government stay out of free enterprise, but it should also stay out of the social engineering which is invariably presented by the non-conservatives as ways of "taking care" of "everyone." This issue all by itself should be enough to make anyone leaning democratic to re-think their position.

Copyright, MCzwz, All Rights Reserved. Originally posted on on 10/19/2008

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