For those struggling to understand the origins of the current financial mess, two articles by Thomas Sowell and Howard Husock can provide much help. Last week in his weekly column, Sowell tartly fingered congress’ continued refusal to provide Fannie Mae and Freddie Mac with real oversight. He then points out the lunacy of having congressmen who continually opposed such efforts — Barney Frank and Chris Dodd — take prominent positions in drafting a $700 billion congressional bailout plan.
In 2000, Howard Husock wrote an amazingly prophetic piece for City Journal, "The Trillion Dollar Bank Shakedown that Bodes Ill for Cities.” Husock dissects how Democrats have jimmied the Community Reinvestment Act – an act passed during the Carter years to help reverse redlining in neighborhoods by forcing banks to make risky loans. Millions in mortgage money and service fees is then funneled back to support many left-wing non-profits such ACORN Housing. Instead of improving the fortunes of troubled neighborhoods, Husock shows how CRA actually perpetuated the plight of the poor by institutionalizing low-income neighborhoods and failing to provide any incentives for economic investment.
The bail out has rightfully enraged many taxpayers. Still one of the worst parts of this debacle is the deception. Congress’ rush to regulate and re-regulate is a ruse. This IS NOT about market failure. It’s about government failure and greed. Period. We need a private sector agency to regulate government interference, dishonesty and failure! Oh wait, isn’t that Congress’ job?