Deregulation Is to Blame?

One of my biggest fears about the likely Democratic sweep next week is the resulting re-regulation of our nation’s economy. Without a Republican president to stand in their way, I truly fear the damage that will be caused by giving people like Barney Frank and Chris Dodd total free reign. Frank’s record speaks for itself. He is the one who famously said in 2003:

“These two entities—Fannie Mae and Freddie Mac—are not facing any kind of financial crisis, [and] the more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.”

Barack Obama has already rationalized this likely torrent of regulation by claiming over and over again that the current mess is a direct result of President Bush “letting the market run wild,” though he never says what specific Bush action he is referring to.

Here is a terrific article from the Wall Street Journal which proves that contrary to Senator Obama’s claim, the last eight years were hardly a period of deregulation. Has Senator Obama never heard of Sarbannes Oxley?

And along similar lines, here is a terrific editorial from the San Diego Union-Tribune which directly traces the Fannie/Freddie mess to Congressional meddling, wherein our Congress pressured lenders to “approve ever more loans to buyers of modest means” thereby “eroding the criteria banks traditionally used to gauge the risk of default.”

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