While some of these risky mortgages were held by commercial banks such as Washington Mutual, other had been packaged and sold as derivatives and other investment products to investment banks. As the housing market collapsed, more and more losses piled up until losses became wholly undeterminable. For the few commercial banks lacking diversity in holdings, they went bankrupt. For the investment banks with enormous asset to liability deficiencies, they either sold themselves for pennies on the dollar to commercial banks, received a federal bailout, or went belly up.

Make no mistake, however. But for the push by Washington to get individuals unworthy of credit into a house they couldn’t afford, no one would be talking about a financial crisis. It is singularly tied to the housing bubble created by government action.

Since 2005, the subprime, option ARMs, and Alt-A loans that resulted in foreclosures have risen from under 2% to roughly 10%, while jumbo prime and agency prime loans remain under 2% of all foreclosures. Similarly, the delinquency rate for subprime, option ARMs, and Alt-A by thirty days or more is just under 25%, 15%, 12%, respectively. Less than 4% of jumbo prime and agency prime loans are delinquent by thirty days or more.

As noted by the Competitive Enterprise Institute, the federal regulatory leviathan, rather than shrinking, has grown unabated. In 2006, regulatory costs exceeded $1.142 trillion, which is greater than the total of federal individual and corporate income taxes collected. Federal agencies issued 3,718 final rules in 2006.

The era of deregulation isn’t over. It never started.

Question Three: How do higher unionization rates make America more competitive and, therefore, stronger economically?

For the sake of cutting through the noise of union propaganda, I will concede that unions drive up wages and benefits for their members. Because liberals always tell us that corporations are greedy, I will assume Senator Obama will concede that unionized corporations won’t pay for those increased wages and benefits by reducing their profits. That means, of course, that union wages and benefits will be paid for by increasing the price of the good or service that the corporation provides, which means higher prices for consumers.

The world, unlike in 1932, consists of a global economy. While unions and liberals like to pretend that they can unilaterally stop the globalization of work and force foreign countries to reduce their competitive advantage of lower wages and manufacturing costs, they can’t. The reality is that countries with strong trade unions and socialist-leaning economic policies like France and Germany are weakening the power of the unions because, no matter how hard they try, they have been unable to force China, India, Malaysia, or even Eastern Europe to adopt their labor standards. As a result, their unemployment rates remain higher than other developed nations and their economies weaker.

Does Senator Obama plan to use tariffs and other trade barriers to try and obtain concessions from lower cost countries? As we learned from the Great Depression, placing tariffs on imports from countries that won’t unilaterally disarm will lead to greater economic damage. So, how will he persuade these countries to adopt America’s more costly labor structure?

Even within the United States, in industries where unions have had their strongest presence, those corporations are withering on the vine of unionization while their non-unionized brethren remain viable. The American carmakers beg bureaucrats in Washington to give them billions in aid because they make cars that simply cost too much due to the higher wages and benefits the unions extracted over the last forty years.

Just down the road in places like Ohio, Honda plants operate at full capacity to meet the ever increasing demand for their lower priced and better (American) built cars. The short-term gain for some union members now retired has come at the long-term expense of those union members who came to the table later, to the communities left to deal with empty plants, and to the jobs that likely would have remained had employees ditched their unions.

The airlines with unionized employees teeter on the verge of bankruptcy while Southwest produces profits, high customer satisfaction rates, and loyal employees. The heavily unionized steel and manufacturing industries long ago lost the battle to the global economy, except in those states with right to work laws that protect workers who don’t want to join the union.

In Washington state, Boeing is losing $100 million a day in deferred revenue because the machinists union rejected an offer worth roughly $38,000 per member over three years. When many Americans are losing their jobs or seeing their wages decline, a $12,500 yearly increase seems pretty generous. Is it any wonder that Boeing wants to move as much of its manufacturing as possible outside of America? Sure, that very outsourcing has resulted in temporary supply chain delays for its revolutionary Dreamliner airplane, but supply chains can be fixed. Union power in a non-right to work state renders Boeing largely powerless. We have seen this story before. It rarely ends well for the consumer or the economy.

In non-right to work states, the unionization rate is nearly twice that of right to work states. Not surprisingly, the unemployment rate in those states is also higher. So is the amount of federal government transfer payments. The average Gross Domestic Product of non-right to work states from 1997 to 2006 is over 14% lower than in right to work states.

The only industry where unions thrive is in government. With their monopolies and lack of profit and loss drivers, government and their union allies grow and cost more every year. Public sector employees now make more than their private sector neighbors who actually pay for their costs. Even in government, unions need affirmative action laws (i.e., prevailing wage) in order to compete, which further drives the cost up for taxpayers. Looming not too far in the distance is the moment when grossly underfunded (and grossly generous) public sector pension plans will require some sort of taxpayer bailout.

Most of America’s public schools are 100% unionized and 100% uncompetitive. They cost too much and accomplish too little. With all of these facts, why does Senator Obama think that increasing unionization rates will be good for America? Does he really think that unionizing 10%, 20%, or 30% of the U.S. economy will make America more competitive globally?

These are very simple questions that Senator Obama should answer. The American economy is in a very rough patch. The last thing it needs is a president who thinks that the road to prosperity is paved by punishing producers, increasing dependency, over-regulating, and driving up labor costs.

“Yes, we can” do that, but we shouldn’t.