Tuesday, September 16, 2008

More on the Financial Crisis

I'm glad the Fed finally decided to draw the line yesterday, refusing to bail out another big time financial company. The fact that Lehman Bros. was actually larger than Bear Sterns at the time of its bailout shows me that they're serious about letting the system work itself out of this mess. As a believer in capitalism, I'm fully supportive of allowing companies who take foolish risks to reap their rewards. The government is responsible for keeping this economy afloat, but whenever possible it should take a hands-off approach to the "free" market. It's now looking like AIG and Wachovia are in serious trouble as well. I'm afraid we're in for some difficult times ahead.

That brings me to Obama's latest charge that this crisis is a result of Republican economic policies. Apparently, he is unaware of the fact that it was the Democrat's New Deal creation, Fannie Mae, which began the process of loaning money to people who couldn't afford it. It was Democrat policy that produced a sense of entitlement to home ownership (and everything else) among the American public. I realize that it's fashionable to blame George Bush for everything bad that happens these days, but he didn't force any of these banks into irresponsible lending practices.

I lay full blame at the feet of The New Deal, America's first step towards the kind of pseudo-socialism that is bankrupting not only our financial institutions, but our government. Maybe a real disaster is what is necessary to shake us out of our lazy, entitlement mentality. Either way, more government intervention, the very root of the problems we now face, is not the solution. Obama may find it easy to stand and point fingers, but his only "solution" is more of the problem.

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