What Went Wrong?

October/17/2008 20:43PM
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Today, in Arizona, I watched Stubing(Gopher,Merrril Stubing, Love Boat, get it?) our 6 foot resident gopher snake kill and eat a pack rat. It was right outside the pack rat’s den. The pack rat had done everything she needed to do to protect her den, spread cactus around the entry, etc. Stubing still got her. I have mixed blessings. Pack rats are not good neighbors. It shows that you never know when a snake will jump up and get you. It made me think of our economic situation. Somehow I saw some similarities between Stubing and Chris Dodd attacking people he claims are responsible for the credit crisis. How did things go so bad we can’t even tell the snakes from the rats? 

For the first six years of the Bush presidency I never understood why President Bush didn’t point to the economy when he was under attack for Iraq. Things were chugging along pretty well. No more attacks on U.S. soil and a strong economy. Until the housing market began to sink and the gas price ran up, it was looking like we were on solid economic ground.

If there had been no federal organization like Freddie and Fannie, there would have been no mortgage mess. No institutions would have taken the sub prime mortgages in the first place. That’s it, end of discussion. You can debate the wisdom of repackaging them in commercial paper and dispensing them all over the world, and all of that is questionable. But, without that initial guarantee, there would not have been a mortgage to begin with. Without ACORN selling the program on the street there would have been fewer sub prime mortgages. 

The housing bubble would have burst because it just couldn’t support the prices being asked. But, the damage would have been manageable. So, who’s to blame? Everyone who had anything to do with Fannie and Freddie. Simple as that. Why not have a good investigation into who did that? Where is the investigative media on this? Where are the Congressional hearings? Where is the FBI investigation?. These two organizations have cost Americans $8 trillion in retirement assets. Why is congress investigating Wall Street? If there had not been bogus mortgages sold to people who could not pay for them, there would not have been the bad commercial paper that brought down so many solid institutions. 

You know it, I know it, and most of the media know it. Why no outcry? The Democrats are in this up to their eyeballs. The mainstream media does not want to upset the idea that the Democrats are the ones who can get us out of this economic mess by telling us they are the ones who got us into it. They are all walking on eggs.

As to the energy mess, I have addressed that ad nauseum. If government got out of the way there would be no energy mess. I was in the oil business when Carter put the allocation program in place. It ran up prices and caused unneeded shortages. Suppliers were daisy chaining fuel with allocations and taking a piece of the action on each transaction. When Reagan eliminated all the government programs and let the marketplace sort it out, the price went down and lines went away.

Obama wants to go back to the Carter programs on energy. McCain is more in favor of the Reagan programs. One will make it better one will make it worse. Energy will rear it’s ugly head again soon, and if we aren’t prepared it will take us back into another downward spiral. Memories get short.

Basically, we get in trouble when the government gets involved. When they stay out of the way, things go much, much better. We have one candidate who wants the government to get more involved and one who wants less–at least less than Obama and less than Bush, who was more like Obama. If we let the government try to do more, we have have less.

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