Sunday, 19 April 2009

Some Idle Comments on Today's Depression

"Executive greed," "excessive risk-taking," are simple, empty terms that merely beg the question. Saying that "greed" caused the current economic crisis is like saying "gravity" caused the ball to be dropped. It is overly simple and it does not exlin the whole story. If you are juggling the ball, and it falls, whose fault is this? If Fannie and Freddie Mac implode; whose fault is that? Is it "greed's fault," or is it the fault of the companies?

1.) Fannie Mae and Freddie Mac, of the notorious "government-sponsored enterprises" (GSEs) fame, are institutions who only serve as a vehicle to enrich certain congressional members, stockholders (who had recieved that stock mainly through the politics of pull, not capitalism) and assorted political hacks. That, however, was the least of our worries - undoubtably, they had full right to enrich themselves as they saw fit. The more money they waste, only gives us a taste of what we deserve. However, what they did: blatant manipulation that any private company would not be able to get away with; that is impossible to ignore.

"Repackaging them as triple-A-rated mortgage-backed securities and throwing them onto the broader securities market. This way, the entire system, from private lenders to Fannie and Freddie to securities firms, was systematically stripped of all the natural private incentives that, under normal circumstance, would be present to balance financial risks along the entire chain." - Thomas E. Woods's Meltdown

The second issue at hand is the long and unholy history of the Community Reinvestment Act. Whose affirmative action schemes, gone to the far end of crazy, enabled certain community groups, such as ACORN and Obama's quaint start in Chicago politics, to effectively shove mortages down private banks with the threat of a wide assortment of such "discrimination" laws at their Far-Left behest.

What those groups did, in their blind zeal to help low-income families regardless of the means, contributed greatly to an ever-higher level of financial risk, which eventually ended up destroying the lives and property of their intended beneficiaries — and many others besides. -Thomas E. Woods's Meltdown

So before you march on Wall Street and demand your taxpayer money back; ask the same question of Beltway.

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