Thomas Sowell on Bailout and Free Market

To be clear, our current financial crisis is not the result of free-market policies as has been stated by many progressive doofuses in government. This problem is the result of government intervention into private enterprise and the free market.

Writing in Townhall:

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.

My guess is that a bailout will occur in the next couple of weeks if not sooner. However, what bill does pass, if one does at all, will be a substantially better bill than the one that was voted down yesterday.

And, if one is passed, it will only do so if Nancy Pelosi, completely out of character, shuts her partisan yap long enough for the vote to take place first--she can demagogue all she wants once the final tally is in.

This bill failed because it is woefully unpopular with the electorate--so unpopular in fact that even many Democrat lawmakers voted against it despite the blame game taking place in Washington. When pension/401k balances begin to get noticed the attitudes of voters living along Main Street might very well start to change their minds about a bill. At that point, a vote for the legislation will get much easier for finger-to-the-wind legislators to make.