By Karen Zapf
TRIBUNE-REVIEW
Thursday, October 16, 2008
Democratic state Rep. Frank Dermody says his experience and record makes him the best choice to continue in the General Assembly representing the 33rd Legislative District.
His Republican challenger, Jason Davidek, said he would bring a fresh perspective that is needed in Harrisburg.
The district in northeast Allegheny County includes all or part of East Deer, Fawn, Frazer, Harmar, Harrison, Indiana, Springdale and West Deer townships and the boroughs of Brackenridge, Cheswick, Oakmont, Plum, Springdale and Tarentum.
Dermody said he is seeking a 10th two-year term because "there's much more to be done."
The lawmaker points to accomplishments in areas such as energy, education and health care. In particular, Dermody said he has proposed legislation that would provide health care coverage to 200,000 additional Pennsylvanians, but the Senate has not voted on it.
Dermody also said he has worked to keep jobs in the Alle-Kiski Valley and create new ones.
Dermody touts the decision by Allegheny Technologies Inc. to build a $1 billion hot strip mill at Allegheny Ludlum's Brackenridge Works. Dermody said he worked on legislation that made the area attractive for the company to build a plant in the Alle-Kiski Valley.
The lawmaker wrote legislation that allows companies to negotiate electric power contracts that save on operating costs. Dermody also worked on legislation that extended the Keystone Opportunity Zones, which provide major tax incentives for developers.
Dermody also is pushing for the Allegheny Valley commuter rail project. The proposed rail line would go from New Kensington to Pittsburgh.
Davidek wants to be part of a reform movement in Harrisburg to "end corruption."
Davidek points to the failed 2005 legislative pay raise and the current scandal in Harrisburg over allegations that bonuses were given to legislative staffers for campaign work. Dermody is not named in the bonus scandal.
"To me, public service is not padding your pocketbook," Davidek said.
Davidek said that as a Fawn supervisor, he has provided "transparency in government" and worked to help his community recover from flooding by getting $200,000 for a road reconstruction project.
He wants to bring jobs back to the Allegheny Valley by helping businesses grow.
Davidek supports reducing the size of the Legislature and a 20 percent cost cut in both chambers.
Under a bill proposed by Rep. T. Mark Mustio, R-Moon, the House would be reduced from 201 to 161 members and the Senate from 50 to 40. The bill mandates a 20 percent cut in the $300 million-plus budget of the Legislature, the largest full-time legislature in the nation.
"It's time to put an end to wasteful spending and taxpayer-funded corruption," Davidek said.
Dermody supports the 20 percent cost cut. But he wants to be cautious when looking at cutting the Legislature and recommends a constitutional convention to study the issue.
Davidek has placed on himself a term limit of eight years, or four terms.
"I'm not in this to be a career politician," Davidek said.
Karen Zapf can be reached at kzapf@tribweb.com or 412-380-8522.
http://www.pittsburghlive.com/x/pittsburghtrib/search/s_593413.html
Tuesday, October 21, 2008
Monday, October 20, 2008
Political Monopoly Power
Thursday, October 16, 2008
By Walter E. Williams
The Federalist Papers, written by James Madison, John Jay and Alexander Hamilton, is the document most frequently referred to when trying to get a feel for the original intent of the framers of the Constitution. One such intention is found in Federalist 56 where Madison says, “...it seems to give the fullest assurance, that a representative for every thirty thousand inhabitants will render the (House of Representatives) both a safe and competent guardian of the interests which will be confided to it.”
Excellent research, found at thirty-thousand.org, shows that in 1804 each representative represented about 40,000 people. Today, each representative represents close to 700,000. If we lived up to the vision of our founders, given today’s population, we would have about 7,500 congressmen in the House of Representatives. It turns out that in 1929 Congress passed a bill fixing the number of representatives at 435. Prior to that, the number of congressional districts was increased every 10 years, from 1790 to 1910, except one, after a population census was taken.
We might ask what’s so sacrosanct about 435 representatives? Why not 600, or 1,000, or 7,500? Here’s part of the answer and, by the way, I never cease to be amazed by the insight and wisdom of our founders: James Madison, the acknowledged father of the Constitution, argued that the smaller the House of Representatives relative to the nation’s population, the greater is the risk of unethical collusion. He said, “Numerous bodies ... are less subject to venality and corruption. “ In a word, he saw competition in the political arena as the best means for protecting our liberties. If Madison were around today to see today’s venal and corrupt Congress, he’d probably say, “See, I told you so!”
In addition to venality and corruption, restricting the number of representatives confers significant monopoly power that goes a long way toward explaining the stranglehold the two parties have and the high incumbent success rates. It might also explain the power of vested interest groups to influence congressional decisions. They only have to bribe, cajole or threaten a relatively small number of representatives. Imagine the challenge to a lobbyist, if there were 7,500 representatives, trying to get a majority of 3,813 to vote for this or that special privilege versus having to get only a 218 majority in today’s Congress.
Another problem of a small number of congressmen, with large districts, has to do with representing their constituents. How in the world is one congressman to represent the diverse interests and values of 700,000 people? The practical answer is they don’t and attempt to be all things to all people. Thus, a congressman who takes a principled stand against the federal government exceeding its constitutional authority—whether it be government involvement in education, business welfare and bailouts and $2 trillion dollars worth of other handouts—is not likely to win office.
Appealing for the votes in a district of 700,000 is a more difficult challenge than appealing for the votes in a district of 40,000 or 60,000 people. Larger sums must be raised requiring a congressman to be wealthy or raise money from vested interest groups. Who is going to give a congressman money and not expect something special in return?
One should not be optimistic about increasing the size of Congress to make it more representative of the American people. There are powerful forces that benefit from the status quo. Fannie Mae and Freddie Mac lobbyists get Congress to look the other way. Hundreds of other lobbyists get Congress to rig the market, or confer special privileges, to benefit one class of Americans at the expense of another class. I guarantee you that the vested interest groups, who now have a strong grip on Washington, at the detriment of the nation’s well-being, wouldn’t as easily get their way if they had to scrounge for 3,813 votes as opposed to 218.
http://www.cnsnews.com/public/content/article.aspx?RsrcID=37632
By Walter E. Williams
The Federalist Papers, written by James Madison, John Jay and Alexander Hamilton, is the document most frequently referred to when trying to get a feel for the original intent of the framers of the Constitution. One such intention is found in Federalist 56 where Madison says, “...it seems to give the fullest assurance, that a representative for every thirty thousand inhabitants will render the (House of Representatives) both a safe and competent guardian of the interests which will be confided to it.”
Excellent research, found at thirty-thousand.org, shows that in 1804 each representative represented about 40,000 people. Today, each representative represents close to 700,000. If we lived up to the vision of our founders, given today’s population, we would have about 7,500 congressmen in the House of Representatives. It turns out that in 1929 Congress passed a bill fixing the number of representatives at 435. Prior to that, the number of congressional districts was increased every 10 years, from 1790 to 1910, except one, after a population census was taken.
We might ask what’s so sacrosanct about 435 representatives? Why not 600, or 1,000, or 7,500? Here’s part of the answer and, by the way, I never cease to be amazed by the insight and wisdom of our founders: James Madison, the acknowledged father of the Constitution, argued that the smaller the House of Representatives relative to the nation’s population, the greater is the risk of unethical collusion. He said, “Numerous bodies ... are less subject to venality and corruption. “ In a word, he saw competition in the political arena as the best means for protecting our liberties. If Madison were around today to see today’s venal and corrupt Congress, he’d probably say, “See, I told you so!”
In addition to venality and corruption, restricting the number of representatives confers significant monopoly power that goes a long way toward explaining the stranglehold the two parties have and the high incumbent success rates. It might also explain the power of vested interest groups to influence congressional decisions. They only have to bribe, cajole or threaten a relatively small number of representatives. Imagine the challenge to a lobbyist, if there were 7,500 representatives, trying to get a majority of 3,813 to vote for this or that special privilege versus having to get only a 218 majority in today’s Congress.
Another problem of a small number of congressmen, with large districts, has to do with representing their constituents. How in the world is one congressman to represent the diverse interests and values of 700,000 people? The practical answer is they don’t and attempt to be all things to all people. Thus, a congressman who takes a principled stand against the federal government exceeding its constitutional authority—whether it be government involvement in education, business welfare and bailouts and $2 trillion dollars worth of other handouts—is not likely to win office.
Appealing for the votes in a district of 700,000 is a more difficult challenge than appealing for the votes in a district of 40,000 or 60,000 people. Larger sums must be raised requiring a congressman to be wealthy or raise money from vested interest groups. Who is going to give a congressman money and not expect something special in return?
One should not be optimistic about increasing the size of Congress to make it more representative of the American people. There are powerful forces that benefit from the status quo. Fannie Mae and Freddie Mac lobbyists get Congress to look the other way. Hundreds of other lobbyists get Congress to rig the market, or confer special privileges, to benefit one class of Americans at the expense of another class. I guarantee you that the vested interest groups, who now have a strong grip on Washington, at the detriment of the nation’s well-being, wouldn’t as easily get their way if they had to scrounge for 3,813 votes as opposed to 218.
http://www.cnsnews.com/public/content/article.aspx?RsrcID=37632
Friday, October 10, 2008
Central Banks Suffer from Two Temptations
"The record shows that when the managers of a central bank in any particular country are looking around for ways and means to accumulate more wealth, they are often tempted by two things which are inherently evil and totally destructive to the foundation of civilized countries. One is to encourage an involvement in war so the nation will be forced to borrow heavily. Bonds (which are really government IOUs paying substantial interest to the lenders) are considered to be a most valuable form of collateral assets in a central bank.
"The other temptation is to promote a cycle of 'boom and bust' economics. This simply consists of starting a boom with generous loans at low interest and easy credit and after a few years suddenly raising the interest rates, calling in loans, and bankrupting homeowners, industries, farmers, and millions of people who had trusted the bank to continue its policies.
"Some economists, including Karl Marx, have tried to maintain that these boom-and-bust cycles are an inescapable characteristic of a free-market economy. The truth of the matter is that these so-called boom-and-bust cycles are primarily a phenomenon of manipulated economics, engineered by men who find themselves in an extremely powerful position to control money and credit but seem to lack the moral integrity to resist the opportunity of fleecing the common people who have genuinely trusted them."
www.nccs.net
"The other temptation is to promote a cycle of 'boom and bust' economics. This simply consists of starting a boom with generous loans at low interest and easy credit and after a few years suddenly raising the interest rates, calling in loans, and bankrupting homeowners, industries, farmers, and millions of people who had trusted the bank to continue its policies.
"Some economists, including Karl Marx, have tried to maintain that these boom-and-bust cycles are an inescapable characteristic of a free-market economy. The truth of the matter is that these so-called boom-and-bust cycles are primarily a phenomenon of manipulated economics, engineered by men who find themselves in an extremely powerful position to control money and credit but seem to lack the moral integrity to resist the opportunity of fleecing the common people who have genuinely trusted them."
www.nccs.net
Wednesday, October 8, 2008
Polls gives Altmire 12-point lead
By The Tribune-Review
Tuesday, October 7, 2008
U.S. Rep. Jason Altmire, D-McCandless, has a 12-point lead over former Rep. Melissa Hart, the Republican seeking to win back the 4th Congressional District post she lost to Altmire in 2006, according to an independent poll released today.
Altmire leads Hart of Bradford Woods by 54 percent to 42 percent, according to the Survey USA poll conducted for Roll Call, a newspaper that covers Capitol Hill. The automated poll of about 600 voters has an error factor of roughly plus or minus 4 percentage points, Roll Call said.
Republican presidential nominee Sen. John McCain leads Democrat Sen. Barack Obama in the district by 8 percentage points, 51 percent to 43 percent, according to the poll. President Bush won the district by 9 points in 2004, though his job approval rating there now is just 30 percent, Roll Call noted. Only 11 percent of respondents approved of the job that Congress is doing.
The 4th District includes most of Beaver and Lawrence counties, and parts of Butler, Allegheny, Westmoreland and Mercer counties.
http://www.pittsburghlive.com/x/pittsburghtrib/news/cityregion/s_592091.html
Tuesday, October 7, 2008
U.S. Rep. Jason Altmire, D-McCandless, has a 12-point lead over former Rep. Melissa Hart, the Republican seeking to win back the 4th Congressional District post she lost to Altmire in 2006, according to an independent poll released today.
Altmire leads Hart of Bradford Woods by 54 percent to 42 percent, according to the Survey USA poll conducted for Roll Call, a newspaper that covers Capitol Hill. The automated poll of about 600 voters has an error factor of roughly plus or minus 4 percentage points, Roll Call said.
Republican presidential nominee Sen. John McCain leads Democrat Sen. Barack Obama in the district by 8 percentage points, 51 percent to 43 percent, according to the poll. President Bush won the district by 9 points in 2004, though his job approval rating there now is just 30 percent, Roll Call noted. Only 11 percent of respondents approved of the job that Congress is doing.
The 4th District includes most of Beaver and Lawrence counties, and parts of Butler, Allegheny, Westmoreland and Mercer counties.
http://www.pittsburghlive.com/x/pittsburghtrib/news/cityregion/s_592091.html
Thursday, October 2, 2008
Destroying Liberty
by Walter E. Williams
Supreme Court Justice Louis Brandeis warned, "The greatest dangers to liberty lurk in the insidious encroachment by men of zeal, well meaning but without understanding." The freedom of individuals from compulsion or coercion never was, and is not now, the normal state of human affairs. The normal state for the ordinary person is tyranny, arbitrary
control and abuse mainly by their own government. While imperfect in its execution, the founders of our nation sought to make an exception to this ugly part of mankind's history. Unfortunately, at the urging of the American people, we are unwittingly in the process of returning to mankind's normal state of affairs.
Americans demand that Congress spend trillions of dollars on farm subsidies, business bailouts, education subsidies, Social Security, Medicare and prescription drugs and other elements of a welfare state. The problem is that Congress produces nothing. Whatever Congress wishes to give, it has to first take other people's money. Thus, at the root of the welfare state is the immorality of intimidation, threats and coercion backed up with
the threat of violence by the agents of the U.S. Congress. In order for Congress to do what some Americans deem as good, it must first do evil. It must do that which if done privately would mean a jail sentence; namely, take the property of one American to give to another.
According to a Washington Post article (6/22/05), there were nearly 35,000 highly paid registered lobbyists in Washington in 2004 who spent $2.1 billion lobbying the White House, Congress and various agencies on behalf of various interest groups. Political action committees, private donors and companies give billions of dollars to political campaigns. My question to you: Do you think that these people are spending billions of dollars to assist presidents and congressmen to better perform their sworn oath of office to preserve, protect and defend the U.S. Constitution? If you do, you're a fine candidate for a straitjacket. For the most part, the money is being spent to get politicians and government officials to use their coercive power to create a favor or special privilege for one American at the expense of some other American.
If we Americans didn't give Washington such enormous control over our lives, I doubt whether there would be 10 percent of the money currently spent on lobbying and campaign contributions. This enormous control that Congress has over our lives also goes a long way toward explaining much of the government corruption that we see in Washington.
If the average American were asked whether he wishes to return to mankind's normal state of affairs featured by arbitrary abuse, control and government dictates, I am sure he would find such a suggestion repulsive. But if you were to ask, say, the average senior citizen whether Social Security, Medicare and prescription drug subsidies should be
continued, he would probably answer yes. The same would be true if you asked
a college professor whether higher education should continue to be subsidized, or a farmer or a dairyman whether their products should be subsidized, or a manufacturer whether there should be tariffs and quotas on foreign products that compete with his product. The problem with congressmen producing favors and privileges to all interest groups is that it creates what none of us wants: massive control, numerous dictates and micromanagement of our lives.
There is no question that if one were to ask whether we Americans are moving towards more liberty or more government control over our lives, the answer would unambiguously be the latter -- more government control over our lives. We might have reached a point where the trend is irreversible and that is a true tragedy for if liberty is lost in America,
it will be lost for all times and all places.
Dr. Williams is a nationally syndicated columnist, former chairman of the economics department at George Mason University, and author of More Liberty Means Less Government
Supreme Court Justice Louis Brandeis warned, "The greatest dangers to liberty lurk in the insidious encroachment by men of zeal, well meaning but without understanding." The freedom of individuals from compulsion or coercion never was, and is not now, the normal state of human affairs. The normal state for the ordinary person is tyranny, arbitrary
control and abuse mainly by their own government. While imperfect in its execution, the founders of our nation sought to make an exception to this ugly part of mankind's history. Unfortunately, at the urging of the American people, we are unwittingly in the process of returning to mankind's normal state of affairs.
Americans demand that Congress spend trillions of dollars on farm subsidies, business bailouts, education subsidies, Social Security, Medicare and prescription drugs and other elements of a welfare state. The problem is that Congress produces nothing. Whatever Congress wishes to give, it has to first take other people's money. Thus, at the root of the welfare state is the immorality of intimidation, threats and coercion backed up with
the threat of violence by the agents of the U.S. Congress. In order for Congress to do what some Americans deem as good, it must first do evil. It must do that which if done privately would mean a jail sentence; namely, take the property of one American to give to another.
According to a Washington Post article (6/22/05), there were nearly 35,000 highly paid registered lobbyists in Washington in 2004 who spent $2.1 billion lobbying the White House, Congress and various agencies on behalf of various interest groups. Political action committees, private donors and companies give billions of dollars to political campaigns. My question to you: Do you think that these people are spending billions of dollars to assist presidents and congressmen to better perform their sworn oath of office to preserve, protect and defend the U.S. Constitution? If you do, you're a fine candidate for a straitjacket. For the most part, the money is being spent to get politicians and government officials to use their coercive power to create a favor or special privilege for one American at the expense of some other American.
If we Americans didn't give Washington such enormous control over our lives, I doubt whether there would be 10 percent of the money currently spent on lobbying and campaign contributions. This enormous control that Congress has over our lives also goes a long way toward explaining much of the government corruption that we see in Washington.
If the average American were asked whether he wishes to return to mankind's normal state of affairs featured by arbitrary abuse, control and government dictates, I am sure he would find such a suggestion repulsive. But if you were to ask, say, the average senior citizen whether Social Security, Medicare and prescription drug subsidies should be
continued, he would probably answer yes. The same would be true if you asked
a college professor whether higher education should continue to be subsidized, or a farmer or a dairyman whether their products should be subsidized, or a manufacturer whether there should be tariffs and quotas on foreign products that compete with his product. The problem with congressmen producing favors and privileges to all interest groups is that it creates what none of us wants: massive control, numerous dictates and micromanagement of our lives.
There is no question that if one were to ask whether we Americans are moving towards more liberty or more government control over our lives, the answer would unambiguously be the latter -- more government control over our lives. We might have reached a point where the trend is irreversible and that is a true tragedy for if liberty is lost in America,
it will be lost for all times and all places.
Dr. Williams is a nationally syndicated columnist, former chairman of the economics department at George Mason University, and author of More Liberty Means Less Government
Wednesday, October 1, 2008
Bailout Politics
by Thomas Sowell
Nothing could more painfully demonstrate what is wrong with Congress than the current financial crisis.
Among the Congressional "leaders" invited to the White House to devise a bailout "solution" are the very people who have for years created the risks that have now come home to roost.
Five years ago, Barney Frank vouched for the "soundness" of Fannie Mae and Freddie Mac, and said "I do not see" any "possibility of serious financial losses to the treasury."
Moreover, he said that the federal government has "probably done too little rather than too much to push them to meet the goals of affordable housing."
Earlier this year, Senator Christopher Dodd praised Fannie Mae and Freddie Mac for "riding to the rescue" when other financial institutions were cutting back on mortgage loans. He too said that they "need to do more" to help subprime borrowers get better loans.
In other words, Congressman Frank and Senator Dodd wanted the government to push financial institutions to lend to people they would not lend to otherwise, because of the risk of default.
The idea that politicians can assess risks better than people who have spent their whole careers assessing risks should have been so obviously absurd that no one would take it seriously.
But the magic words "affordable housing" and the ugly word "redlining" led to politicians directing where loans and investments should go, with such things as the Community Reinvestment Act and various other coercions and threats.
The roots of this problem go back many years, but since the crisis to which all this led happened on George W. Bush’s watch, that is enough for those who think in terms of talking points, without wanting to be confused by the facts.
In reality, President Bush tried unsuccessfully, years ago, to get Congress to create some regulatory agency to oversee Fannie Mae and Freddie Mac.
N. Gregory Mankiw, his Chairman of the Council of Economic Advisers, warned in February 2004 that expecting a government bailout if things go wrong "creates an incentive for a company to take on risk and enjoy the associated increase in return."
Since risky investments usually pay more than safer investments, the incentive is for a government-supported enterprise to take bigger risks, since they get more profit if the risks pay off and the taxpayers get stuck with the losses if not.
The government does not guarantee Fannie Mae or Freddie Mac, but the widespread assumption has been that the government would step in with a bailout to prevent chaos in financial markets.
Alan Greenspan, then head of the Federal Reserve System, made the same point in testifying before Congress in February 2004. He said: "The Federal Reserve is concerned" that Fannie Mae and Freddie Mac were using this implicit reliance on a government bailout in a crisis to take more risks, in order to "multiply the profitability of subsidized debt."
Chairman Greenspan added his voice to those urging Congress to create a "regulator with authority on a par with that of banking regulators" to reduce the riskiness of Fannie Mae and Freddie Mac, a riskiness ultimately borne by the taxpayers.
Fannie Mae and Freddie Mac do not deserve to be bailed out, but neither do workers, families and businesses deserve to be put through the economic wringer by a collapse of credit markets, such as occurred during the Great Depression of the 1930s.
Neither do the voters deserve to be deceived on the eve of an election by the notion that this is a failure of free markets that should be replaced by political micro-managing.
If Fannie Mae and Freddie Mac were free market institutions they could not have gotten away with their risky financial practices because no one would have bought their securities without the implicit assumption that the politicians would bail them out.
It would be better if no such government-supported enterprises had been created in the first place and mortgages were in fact left to the free market. This bailout creates the expectation of future bailouts.
Phasing out Fannie Mae and Freddie Mac would make much more sense than letting politicians play politics with them again, with the risk and expense being again loaded onto the taxpayers.
Copyright © 2008 Salem Web Network. All Rights Reserved.
Nothing could more painfully demonstrate what is wrong with Congress than the current financial crisis.
Among the Congressional "leaders" invited to the White House to devise a bailout "solution" are the very people who have for years created the risks that have now come home to roost.
Five years ago, Barney Frank vouched for the "soundness" of Fannie Mae and Freddie Mac, and said "I do not see" any "possibility of serious financial losses to the treasury."
Moreover, he said that the federal government has "probably done too little rather than too much to push them to meet the goals of affordable housing."
Earlier this year, Senator Christopher Dodd praised Fannie Mae and Freddie Mac for "riding to the rescue" when other financial institutions were cutting back on mortgage loans. He too said that they "need to do more" to help subprime borrowers get better loans.
In other words, Congressman Frank and Senator Dodd wanted the government to push financial institutions to lend to people they would not lend to otherwise, because of the risk of default.
The idea that politicians can assess risks better than people who have spent their whole careers assessing risks should have been so obviously absurd that no one would take it seriously.
But the magic words "affordable housing" and the ugly word "redlining" led to politicians directing where loans and investments should go, with such things as the Community Reinvestment Act and various other coercions and threats.
The roots of this problem go back many years, but since the crisis to which all this led happened on George W. Bush’s watch, that is enough for those who think in terms of talking points, without wanting to be confused by the facts.
In reality, President Bush tried unsuccessfully, years ago, to get Congress to create some regulatory agency to oversee Fannie Mae and Freddie Mac.
N. Gregory Mankiw, his Chairman of the Council of Economic Advisers, warned in February 2004 that expecting a government bailout if things go wrong "creates an incentive for a company to take on risk and enjoy the associated increase in return."
Since risky investments usually pay more than safer investments, the incentive is for a government-supported enterprise to take bigger risks, since they get more profit if the risks pay off and the taxpayers get stuck with the losses if not.
The government does not guarantee Fannie Mae or Freddie Mac, but the widespread assumption has been that the government would step in with a bailout to prevent chaos in financial markets.
Alan Greenspan, then head of the Federal Reserve System, made the same point in testifying before Congress in February 2004. He said: "The Federal Reserve is concerned" that Fannie Mae and Freddie Mac were using this implicit reliance on a government bailout in a crisis to take more risks, in order to "multiply the profitability of subsidized debt."
Chairman Greenspan added his voice to those urging Congress to create a "regulator with authority on a par with that of banking regulators" to reduce the riskiness of Fannie Mae and Freddie Mac, a riskiness ultimately borne by the taxpayers.
Fannie Mae and Freddie Mac do not deserve to be bailed out, but neither do workers, families and businesses deserve to be put through the economic wringer by a collapse of credit markets, such as occurred during the Great Depression of the 1930s.
Neither do the voters deserve to be deceived on the eve of an election by the notion that this is a failure of free markets that should be replaced by political micro-managing.
If Fannie Mae and Freddie Mac were free market institutions they could not have gotten away with their risky financial practices because no one would have bought their securities without the implicit assumption that the politicians would bail them out.
It would be better if no such government-supported enterprises had been created in the first place and mortgages were in fact left to the free market. This bailout creates the expectation of future bailouts.
Phasing out Fannie Mae and Freddie Mac would make much more sense than letting politicians play politics with them again, with the risk and expense being again loaded onto the taxpayers.
Copyright © 2008 Salem Web Network. All Rights Reserved.
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