The View From 1776
Friday, September 26, 2008
Thomas Sowell Opines on the Bailout
Read A Political “Solution”: Part II, by Thomas Sowell.
But bailing out people who made ill-advised mortgages makes no more sense that bailing out people who lost their life savings in Las Vegas casinos. It makes political sense only to people like Senator Dodd, who are among the reasons for the financial mess in the first place.
People usually stop making ill-advised decisions when they are forced to face the consequences of those decisions, not when politicians come to their rescue and make the taxpayers pay for decisions that the taxpayers had nothing to do with.
The Wall Street Journal, which has for years been sounding the alarm about the riskiness of Fannie Mae and Freddie Mac, recently cited Senator Christopher Dodd along with Senator Charles Schumer and Congressman Barney Frank among those on Capitol Hill who have been “shilling” for these financial institutions, downplaying the risks and opposing attempts to restrict their free-wheeling role in the mortgage market.
As recently as July of this year, Senator Dodd declared Fannie Mae and Freddie “fundamentally strong” and said there is no need for “panicking” about them. But now that the chickens have come home to roost, Senator Dodd wants to be sure to get some goodies from the rescue legislation to pass out to people likely to vote for him.
Let’s hope that some good for the whole nation comes from this fiasco. Number one on the wish list is a return to the ethos that prevailed in the United States from the early 17th century into the early 1960s: the understanding that everyone must work and save before buying and that debt is to be avoided like the plague.