The financial meltdown in the United States was the government’s fault. As I have addressed previously, our Congress, in an attempt to increase the affordability of home ownership, pushed Fannie Mae and Freddie Mac (government sponsored mortgage guarantee corporations) to originate and package sub-prime loans. The program was a success. Millions more Americans who previously could not afford homes were granted mortgages and home ownership rates reached new highs. A housing boom resulted, prices of homes skyrocketed, and the economy was on a roll. Unfortunately, many of those new homeowners had no reasonable ability to repay when times got tough. The housing bubble peaked, demand decreased, housing prices plummeted, and mortgage defaults skyrocketed. The credit meltdown had begun.
Enter Congress. Unwilling to accept any responsibility for their complicity in the credit debacle, Democrats in Congress began a chorus of criticism calling for more regulation of the financial industry to rescue the public from the "evils" of free market capitalism and the "greed" of Wall Street financial firms.
Regulation is the use is government power to effect private behavior to conform to the desire of government officials. No cliché is more true than “Power corrupts and absolute power corrupts absolutely.” Much like an illicit drug corrupts a user through addition, the power to regulate and legislate corrupts government officials through vanity, elitism, conceit, and self-righteousness.
Just as a drug addict can not begin the difficult road to recovery until they admit they have a problem, our government can not begin the return to health until those in power admit that they were complicit in causing the financial meltdown in the first place.
Republicans in Congress must demand accountability and stand against this power grab by Democrats under the veil of protecting the public from "evil" Wall Street. We must not allow those in Congress to pass new financial regulations until they admit that they themselves erred and started the real estate bubble through easy money and allowing Fannie Mae and Freddie Mac to guarantee sub-prime mortgage loans to poorly qualified borrowers.
Yes, I know: fat chance. Well then, so be it. Its better we deal with poorly constructed financial regulation as it exists than enable government power addicts who accept no responsibility by forfeiting more of our precious liberty for security they can not provide.