The Betrayal of the American Taxpayers
by Sam Wells

It's pretty clear that the ONLY people in Washington that are going to bat for the American taxpayers are the conservative Republicans in the House of Representatives.  They are like the little Dutch boy holding his finger in the dike.  They are the only ones opposing this outrageous bailout proposal from Secretary Paulson (and which they trotted President Bush out to support on TV the other night).

The Democrats and the Bush Administration are trying to push this outrageous corporate welfare bailout scheme down the throats of American taxpayers.  The only real opposition is coming from the pro-freedom minority in the House of Representatives.  It's the conservative Republicans in the House on one side versus  the House Democrats, the Senate Democrats, the Senate Republicans, the Secretary of the Treasury, the Federal Reserve Chairman, and the President of the United States on the other.  The House Repubs are the good guys --  the ONLY ones standing up for capitalism and the American taxpayers!  The House conservative Repubs  need to get some positive feedback -- to hear applause and support from Americans.  They are the only heroes in Washington and they may not hold out much longer.

Meanwhile, here is my alternative proposal to Paulson's bailout scheme:

1.  Abolish the capital gains tax and repeal the Sarbanes-Oxley Act and abolish the "mark-to-market" accounting regulations.

2.  Defund ACORN.  No more taxpayer money to groups like ACORN!  And repeal the Community Reinvestment Act and all other such legislation.

3.  Sell off Fannie and Freddie assets to highest bidders.  Let prices fall to whatever is necessary to clear the market.

4.  Frog march the following crooks and culprits to federal lockups:  Franklin Raines, Jamie Gorelick, Christopher Dodd, Barney Frank, Charles Schumer and initiate an independent investigation of all those individuals who served as officers or board members on or had any supervisory or oversight responsibilities over Fannie Mae or Freddie Mac.

5.  No bailout money from taxpayers.  Let the hammer fall!  Clear the unsound politically-induced investments and loans.

6.  Forbid the federal government from ever again getting involved in the mortgage industry or housing market.  We don't need government's reverse Midas touch meddling in the marketplace.

What about those brokers and lenders who made fat fees and bonuses off the bad loans and deals?  Of course, many gladly cashed in on and took advantage of the politically-induced, "politically correct" pressures to make the bad deals and get fees for them --  but it can also be argued that many were coerced/blackmailed into doing it by the federal government agencies and groups like ACORN.  They were not all fully willing accessories to the unsound deals made.  One of the greatest evils of government meddling in the market is that it blurs the distinction between the good and moral on one side and the evil and immoral on the other and it is sometimes virtually impossible to practically separate the villains from the victims.  But I hold those who actively and deliberately created the agencies and interventionist context which led to the (easily predictable) crisis to be most culpable.  Economists such as Walter Williams and George Reisman, as well as a few conservative Republicans in the House, all warned of this long ago.

By repealing the Community Reinvestment Act signed by Carter and all the legislation that created Fannie Mae and Freddie Mac and all the other government involvements in the housing industry as well as the antidiscriminaiton legislaiton, we could go to a true free market in housing and this would make certain that this kind of mortgage crisis could not happen again in the future.  Of course, the housing bubble artificially blown up by political involvement would collapse,and prices would fall to their true market levels.  That is a necessary corrective.

But, even if a fully free market were to be established today -- right now -- even the free market could not completely reverse or undo all the malinvestments, resource misallocations, and all the harm done as a consequence of the interventionism of the past.  One of the worse evils of legislation like the Community Reinvestment Act and Fannie Mae, Freddie Mac, and other forms of government intervention in the economy in general is that it blurs the distinction between good and evil and often makes anything close to perfect justice impossible to achieve.  So, even if America were politically ready to go to a free market economy, there would be, I am sure, many malefactors who would never get their comeuppance.

Lessons from the Bailout -- Dr. Walter E. Williams

The "Deregulation" Mantra? -- John Stossel
Blame "deregulation"?  What "deregulation"?

Was the Sub-Prime Mortgage Crisis Caused by Lack of Regulations? -- William B. Conerly

The Myth that Laissez Faire Is Responsible
for Our Financial Crisis -- Dr. George Reisman

Another "Deregulation" Myth:  A cautionary tale about financial rules that failed  -- WSJ

The Betrayal of America  -- Edward Cline