Solving the root cause of the financial crisis

It is important to note that the current economic state is the resultant disease of the nanny-state virus. There were symptoms along the way, and while some took note, most dismissed them. I place less blame on that aspect- I believe that dismissal to be more a function of human nature than human negligence. We all establish priorities, and predicted failure while profits are soaring, probably just didn't seem important enough to deal with. All this goes to reinforce your point- the root cause of the financial crisis was the nanny-state virus which, by all accounts, was manipulated by greedy executives at Fannie and Freddie, and glossed over by politicians likely to benefit in the form of votes.

Unfortunately, I don't think that will be the headline though- as we've seen so far, the "guilty Wall Street execs" are the only ones being called in front of those same politicians who played a major role in this. I don't see Barney Frank testifying to Henry Waxman about his role in this. Same for Dodd, or any other Democrat- not as long as they are in power.

It's a very sad state we're entering...

Several other critical points in this problem:

Fannie and Freddie are "quasi" government entities overseen by Congress. As such they should not be allowed to donate to the campaigns of Congress. This is an obvious conflict of interest in the minimum or bribery at the worst.

These are social engineering projects for Congress which they have allowed to become "too large to fail". Well, part of this solution would be to pary them down to a more manageable size and make them private enterprises. I read between the two they hold 50% of the residential mortgages in the US. It seems the Federal Trade Commission would have a problem with this.

An aside, I heard Rush Limbaugh recite details that there are 5 million mortgages to illegal aliens in this problem. Results of no checking of Social Security numbers during the loan process.

And yes, Frank and Dodd are absolutely culpable in this matter. Barney Frank making public statements concerning the financial well-being of Fannie and Freddie should be enough to have an investigation. His utterances could and probably did result in investors placing investments. Certainly would have been a problem for a CEO who made those statements.

If Obama wins the elections Frank and Dodd will certainly not be investigated and probable held up as heroes.

So if someone is upside down on their mortgage and are bailed out by the government through the "cramming down" scenario. The house purchased for $349,000 is now worth $229,000. The loan is refinanced at $229,000 for 30 years fixed. The bank and the government absorb the pricicpal difference. In ten years when the house is valued at $400,000 and is sold, do we get a payback? If not, why not?

So, I heard yesterday that every mortgage will be forced to pay $420/$100K for community organizing (aka ACORN). This is part of the bail out package. Is there no end to the absurdity our Congress can acheive? The borrower pays this money, is this a way to reduce the cost of housing? Who is being paid off through this?