How Government Stoked the Mania

Great read in the Wall Street Journal on How Government Stoked the Mania, starting with Fannie Mae and Freddie Mac and later how the Community Reinvestment Act, and the Federal Reserve, and both the Clinton and Bush administration helped created the current “crisis” through government intervention. (Previous posts on that here and here).

I highly recommend this article to both Joe Biden and Nancy Pelosi who blame the free market and “deregulation” (which never happened), as well as to Sarah Palin should have responded to Biden with this kind of smackdown.

Another recommended reading is this piece in The American magazine, A Bill that Deserves to Fail, which also features some recommendations, though missing some of the most important free market alternatives to the bailout.

Finally, another important lesson of this debate is the distinction between corporatism and laissez-faire, which Cato-at-Liberty has a post on, or between big business and free markets. As I pointed out before, big business loves big government – case in point: the “business groups” of PA have joined in with the fear-mongering rhetoric.