As Charles Calomiris, of Columbia University, and Peter Wallison,of the American Enterprise Institute point out, because of tax-payer backing, Fannie Mae and Freddie Mac "were able to borrow as much as they wanted for the purpose of buying mortgages and mortgage-backed securities." And, according Calomiris and Wallison, as they pursued a mission to encourage "affordable housing," they enabled massive growth in the amount of shaky sub-prime loans flowing to the marketplace over the last few years.
It's incredible how generous you can be with other people's money. While taxpayers were driving their kids to school and going to work, politicians were setting them up to guarantee the debt of mortgage-backed securities buying behemoths.
It's the increasingly shaky state of the law -- both as it defines the constitutional limits of the federal government and the integrity of our private property -- that sits at the core of our problems today.
It stands to reason that if all it takes is a smooth talking politician to expropriate the property of individuals or businesses, that the ability and willingness to work, save, invest and do business will suffer. And that prosperity will decline.
Barack Obama is running for president to save us from ourselves and give politicians even more sway over our private lives and property. He's telling us that it's "Wall Street CEOs whose greed and irresponsibility got us into this mess."
But Obama sat by in silence as the Senate tried to reform Fannie Mae and Freddie Mac in 2005. And he's taken $126,349 in contributions from Fannie and Freddie, second highest in the Senate (only behind Banking Committee chairman Chris Dodd).
The decline in economic freedom in the U.S. is what should concern us today. We need less political hot air and fewer politicians who want to degrade the very law that is there to protect us.
This is what citizens should be looking for as we try to get out of today's mess.