Why the Credit Crisis Is the Government's Fault

Over at Reason TV American Enterprise Institute Fellow Peter Wallison lays out the genesis of our current financial crisis. It's about 25 minutes long but a very methodical presentation of the facts.

Some like to blame Wall Street greed for the meltdown. I'm not saying that there isn't blame to be assessed there too, but I can't help but observe that Wall Street's reaction is somewhat like the HAL 9000 computer in 2001: A Space Odyssey. It became irrational because it was instructed to do something fundamentally at odds with its programming. Banks were made to lend to borrowers whom their normal underwritng standards said they should not or be fined for doing so. They were placed in a no-win situation and the ways they tried to reconcile the two competing goals of prudent lending and complying with the Community Redeveloment Act (CRA) caused them to do increasingly irrational things. It's just one more example of how political interference in free markets, well intentioned or not, produces undesireable results.

Update: History of the HAL 9000. HAL was constructed for "the accurate processing of information without distortion or concealment". However, he was asked to conceal information from the Discovery crew and the only way he could reconcile the contradictory instruction was to kill the crew, therefore leaving no one to conceal anything from.

"We the People" Have Lost Control of Washington

As Tom Blumer says over at Pajamas Media, "the bailout saga proves the elites don't care what we think." I certainly agree with the sentinment shared by many that it's time the entire Congress was replaced. They barely even pretend to listen to the voters anymore. Back to Tom Blumer:

"In mid-September, when it became clear to Hank Paulson, Ben Bernanke, and George Bush that extraordinary measures were needed to address the mess that had built up in the financial markets during the past decade or so, their first instincts should have been to say:

• “We need to have a complete plan to deal with this.”
• “We need to make a case to Congress and the American people that our plan will work.”
  

They did neither of these things; nor did they even seem to consider whether what they wanted was even constitutional."

Does anybody out there know whether we can sue to block implementation of this bailout plan on Constitutional grounds before it gets any worse (and it will get worse if we don't start screaming even louder about it)?

(via Instapundit)

The Bailout and "The Blob"

Pajamas TV has this interesting little video perspective, presented by Bill Whittle, on the just-passed bailout bill and its growth metastasization from 3 pages to over 400 in the course of just two short weeks.

Hey, Congress. If you really want to help, don't help! And certainly don't help your self to all the goodies.

More on Fannie/Freddie and Graft

(via Instapundit) This is an excellent question:

"And this is why Congress is half the approval rating of President Bush (lower than third-hand used car salesmen, or lawyers). This is why I'm glad that "quick is not good" is carrying the day. Here we are, at the so called "worst financial flop since the Depression" and the long term politicians are STILL being politicians instead of leaders.

So tell me again: why should I trust my government that is out to bury me? And why do we need (or want) professional politicians?"

Ouch Indeed. Democrats Lying to Avoid Proper Oversight of Fannie/Freddie

Via Vodkapundit, More video on Fannie Mae and Freddie Mac showing Democrat lawmakers trying to claim there are no problems. Not a pretty picture at all for the dems.



Spread the word.

Video - Burning Down The House: What Caused Our Economic Crisis?

Watch this. It's almost 10 minutes long but worth the time.


Update: Related Video here. Ouch Indeed.