Sunday :: Oct 12, 2008

Free Market Fundamentalism

by Mary

Right-wing hacks are doing all they can to blame the financial debacle on liberal programs designed to help the wrong people get mortgages. For weeks the McCain message has been that it was Fannie Mae and Freddie Mac driving the mortgage collapse and the one thing that would make things worse is to let government regulate the industry because it was bad regulations that created the mess. This blind thinking is what you would expect from a man who gets his smart economic advice from his good friend Phil Gramm. Fortunately, McClatchy has a great report today showing that it was the private sector that was behind the subprime crisis.

Why is the right wing is working so hard to convince the public that the problems arose from liberal programs such as Fannie Mae and Freddie Mac, the Community Reinvestment Act and ACORN? Certainly if you watch any of the videos of the McCain rallies, you know that the Republican base has latched on to the idea like a drowning man because it allows them to express their anger and hatred. But if you look at the people who are pushing this meme the most, it is clear that they are desperately trying to keep the market free from regulations. They are still the market fundamentalists who believe that an unfettered market magically works to bequeath wealth on the right people.

What is equally clear is that to continue to believe in fairy tales is guaranteed to make things worse. George Soros said it best when he called the ideology that drove this disaster free market fundamentalism. It's time to understand what got us in this mess and then base our policies on fixing the real problems.

Update: The Seattle PI has a two part series discussing how the financial system avoided legal liability for their toxic loans and how the feds kept states from trying to regulate the mortgage market.

Mary :: 11:40 AM :: Comments (9) :: Digg It!