Tuesday, January 1, 2013

Reinventing The Broken Wheel

What is it about the far left that they never learn from their mistakes (nor do they admit them, for that matter). And what is about the right that they are unable to point out any of this to the nation.

The biggest scandal of our lifetime is the subprime crisis that led to our economic meltdown - and from which we have yet to recover. I have maintained for years now that there should have been a miles long line of bankers, bond rating agency managers, Wall St. types, Fannie and Freddie managers and others who should have been prosecuted over our economic meltdown. When these people colluded to bundle and then rate subprime bonds with a AAA rating, that was pure fraud. Yet there has not been a single related criminal prosecution brought under the Obama administration. That itself is a scandal.

Worse, Fannie and Freddie, the two institutions at the heart of our meltdown, have not been privatized. To the contrary, under Obama, they are now not merely true government wards, but they are right back in the middle of the housing market - insuring 90% of all new mortgages. Worse yet, they are not merely back in the middle of the sub-prime market, they own it entirely - which is to say it is backed by the full faith and credit of every taxpayer in the nation.

Then to top it all off, over the past several days, both houses of Congress have released the results of ethics investigations holding no one in Congress liable for their acceptance of below market rate mortgages from Countrywide - a private mortgage company joined at the hip with Fannie and Freddie and that lobbied to keep the subprime lending going full speed ahead - at least until the company itself went bankrupt.

All aspects of this scandal are being swept under the rug, with no effort being made to diagnose the problems, nor to hold those liable where appropriate. As John Fund writes at NRO:

In Star Wars, Obi-Wan Kenobi used an old Jedi mind trick on Stormtroopers to deflect them from their real quarry: “These aren’t the droids you’re looking for.” It worked.

It looks as if another mind trick, well known in the Congress — delay and deflection — will now work to make Americans forget one of the biggest scandals of our time: the housing collapse that triggered the 2008 financial meltdown we are still suffering from. We shouldn’t just gaze over the fiscal cliff everyone else is scrutinizing; we should also examine the droids who helped set in motion our current economic mess.

To cure the problems, you first have to diagnose them - and that has yet to happen in America. Under Obama administration, it never will.

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