Thomas Sowell :: Townhall.com :: A Political “Solution”
Why then is there such a mess in the financial markets? Much of that mess is due to the very people we are now turning to for solutions– members of Congress.
Past Congresses created the hybrid financial institutions known as Fannie Mae and Freddie Mac, private institutions with government backing and political influence. About half of the mortgages in this country are backed by these two institutions.
Such institutions– exempt from laws that apply to other financial institutions and backed by the implicit promise of government support with the taxpayers’ money– are an open invitation to risky behavior. When these risks blew up in their faces, Fannie Mae and Freddie Mac were taken over by the government, costing the taxpayers billions of dollars.
For years the Wall Street Journal has been warning that Fannie Mae and Freddie Mac were taking reckless chances but liberal Democrats especially have pooh-poohed the dangers.
Read it all.
UPDATE: And then read this.
