I was just listening to an NPR economist that was talking about the banking crisis.
Just a quick recap on the crisis….
Liberals in government (Democrats and Republicans) wanted to bribe voters by promising everyone a home. even if they couldn’t afford it.
They passed legislation and threatened lawsuits that forced banks to make loans that could only be sustained by constantly rising home prices. The banks didn’t mind making the loans because the interest rates were high and the risk wasn’t. In a free market the risk would have been high, but this is no free market. No, we have Fannie Mae and Freddie Mac which are government-sponsored banks that buy sub-prime mortgages from private banks. No one would want these loans except that Fannie and Freddie are backed by the government, a fact that was proven by the 2008 bailouts. The problem is that the bad loans didn’t just take down Fannie and Freddie. They created mortgage-backed securities and re-sold them on the open market to other institutions. People were eager to buy them because they seemed like a good deal and there was some level of protection from the federal government… another fact that was proven by the various bank and financial institution bailouts!
In 2008 the housing market tanked and people were underwater on their loans. The defaults started and the banking system started to bleed.
Fast forward to today. We’ve bailed out the major banks and we’ve temporarily stimulated the economy at the expense of Trillions of government debt that our children and grandchildren will have to pay for.
Moral of the story: GOVERNMENT IS A F*** UP. IT NEEDS TO BE LIMITED AND RETURNED TO CONSTITUTIONALITY.
FDR shredded the constitution and since then government has grown with little to stop it.
OK, enough ranting…. back to NPR.
NPR had an economist on that said that the way to prevent another banking crisis is putting FEAR of losing money in the hearts of bankers.
WTF!?!?!?!?! That is EXACTLY WHAT THE FREE MARKET DOES. If you make bad investments in a free market then you lose your money. Government guarantees CAUSED the banking crisis. Fannie Mae and Freddie Mac were guaranteed by the federal government and that’s why they bought so many bad loans. If they hadn’t been there to buy bad loans then banks wouldn’t have made them.
In a free market you don’t have problems with bad investment! People that make bad investments go out of business! People that make good investments will succeed.
Collectivists simply hate freedom. NPR is clearly run by collectivists. They’re so blinded by their ideology that they can’t see that FREEDOM IS ALWAYS THE SOLUTION.