A Government-Sponsored Financial Meltdown

This video provides some great analysis from Mary Kissel at the Wall Street Journal over who’s really to blame for the 2008 financial and subsequent economic meltdown, and how a current lawsuit further reveals the guilty.

From the beginning, the Leftists who created the mess in the first place have desperately tried to blame the free market, deregulation, and every other thing under the sun but themselves, and the “mainstream” media has come alongside with a dutiful can of white paint for the whitewashing party.

Facts are pesky things, however, and those of us who look beyond the pap the “mainstream” media feeds us have known the truth for a long time.

The Marxists with the Occupy Wall Street movement would do themselves and the country a favor if they’d read about this latest development…but I won’t be holding my breath. It would ruin their narrative, after all.

As Kissel explains, the Securities and Exchange Commission (SEC) investigated the meltdown and found that Fannie Mae and Freddie Mac (government-created lending institutions) were given politically correct edicts by the federal government to make loans to people with a dubious ability to repay those loans. When a financial institution ignores common sense and simple economics in making loans to people who don’t have the money to repay, they undermine the viability of their enterprise and could end up risking everything (in the case of Fannie and Freddie, the taxpayers were on the hook from the git-go).

 And it seems Fannie and Freddie aren’t really contesting the ugly truth about this insanity.

I have several years of experience working within the financial industry, and it doesn’t take a genius to realize that while a lending institution can recoup some of its losses from risky loans with higher interest rates, the government keeps a lid on interest rates (especially to protected groups), and ultimately you can only go so high with an interest rate before the loan becomes unpayable because of the interest. A company can accept some risk in order to expand its customer base, but if you go too far out on a limb, the weight of those risky loans will eventually get to be too much and the limb will break underneath you.

But since the taxpayers were backing Fannie and Freddie, and the crony politicians can just manufacture more money to feed the machine out of taxes, debt, or printed money, some people thought it was no problem. Apparently they were wrong. It was a big problem.

This is just another example of why the federal government has no business whatsoever meddling in the free market, much less trying to play both competitor and referee in the free market.

But will anyone in Washington learn?  Only if we put out the guilty parties (and Party) to pasture.

2 Responses to “A Government-Sponsored Financial Meltdown”

  1. Yes, Leftists usually are “amused” when they receive the blame they deserve. Yes, Republicans had the White House and congress for most of the decade prior to the meltdown, but you’re forgetting some very important facts. One is that some of the policies that caused the problems go back to the Clinton era, and that Dems had control of congress for the two years prior to the meltdown–a time when it was becoming obvious that action needed to be taken to avert the disaster…only to have Democrats insist that all was well and nothing needed to be done. One should note, too, that there are Leftists in both parties.

    To be honest, I have no idea what Leftists in Europe may have done to screw up their own countries through the finance industry. All I know is what Leftists did to screw up America’s situation, and it was something we could see coming from a mile away and did nothing about because too many Leftists were on the take at the taxpayer’s expense.

    And the facts back that up in spades.

  2. Barack Obama’s theme song: http://www.youtube.com/watch?v=aiGg8D4hFLc http://www.youtube.com/watch?v=0CulYIQ-ItY
    Move over Jimmy Carter, America has now found your replacement!