Where Have All the Capitalists Gone

I thought big Ben Bernanke was a capitalist but it appears I may have been wrong.

"Government likely has a role to play in supporting mortgage securitization, at least during periods of high financial stress"

Why? Since when did our entire economy become dependent on securitized mortgages. In my opinion never.

"From a public policy perspective, a greater concern with fully privatized [firms] is whether mortgage securitization would continue under highly stressed financial conditions," he said. "As I have noted, almost no mortgage securitization is occurring today in the absence of a government guarantee."

Wait, so in a situation like this banks would actually have to hold the loans that they made? Oh no!!! Then they might even have to make sure the borrower was credit worthy.

"As the Federal Reserve has argued for many years, the enormous [Fannie and Freddie] portfolios pose risks to financial stability," he warned.

Let me get this straight, you want a massive government agency to oversee and back all trillions of dollars of mortgages but the size of the current government agencies doing just that is a threat to stability.
Perhaps if the government had kept its nose out of the mortgage business all along several private smaller versions of Fannie and Freddie would have cropped up to fill that need in the economy. Politicians must think that because they cant see the "invisible hand" it must not exist.

Bumper Stickers

Lately I've been seeing some Bush is a dictator bumper stickers. That can hardly be true because in a real socialist or communist dictatorship the people and their cars would have disappeared from this planet long ago. As I remember 20 million people in Stalin's Russia for example. I'd bet a burrito that the people driving those cars would have no problem telling me what doctor I would see and what quality of health care I could have. Now that a dictatorship.

Regulation

Many people believe that increased regulation is needed in response to the current credit crisis. As Coyote points out the question should be asked if government could do any better. After all the OFHEO, whose only job is to monitor Fannie and Fredie, reported to congress in April that they had more than sufficient capital even under current circumstances. Oops. Oh ya, and their 68 million dollar budget, of which at least 80% must be used for auditing and monitoring, and staff of over 200 people seemed to drop the ball. I'm not totally certain but I kind of doubt that Fannies audit by Delloite and Touche cost 60 million.

Overstepping Bounds

I almost always side with the police on issues but this from the Maryland State Police is to much. If you don't want to read it it essentially says that 53 peaceful activists were put on the terrorist watch list. Why? Well according to their fearless leader:

"I don't believe the First Amendment is any guarantee to those who wish to disrupt the government,"

I hate to be the bearer of bad news for him but that is exactly what the First Amendment is there to guarantee.

HT: Coyote Blog