Wednesday, July 16, 2008

Dodd and the Monopolists

The senator from Connecticut is the best friend monopolists ever had.

Among all the piffle and patter concerning the housing crisis, it has not been sufficiently noticed that this is a “made in Washington” fiasco.

Fanny Mae and Freddy Mac, both teetering on the edge of bankruptcy, are quasi- governments creatures -- federal monopolies, in fact – that pushed the envelope on awarding housing loans to people who could not support them because they knew taxpayers would pick up the tab when they engaged in risky and possibly criminal lending practices that Dodd's children would scorn, if they were grown-up like their Daddy.

This is not a point one expects to be discussed at length by Connecticut senator Chris Dodd during any of his senatorial inquisitions as the banker’s banker-in-chief in Washington.

Perhaps The New Yorker could develop a suitable cartoon showing the connections between bought and paid congresspersons and infinitely stupid bankers for its next cover.

Fanny and Freddy were able to drive other responsible home lenders from the market, assuring a virtual monopoly in home lending for themselves, because no other lender was given preferment’s from wall-eyed congressmen like Dodd.

These are the same people who want to manage wars and the nation’s health insurance.

Since a tax payer’s bailout of idiot bankers appears to be a virtual certainty, why not withdraw those preferments from Fanny and Freddy in the future and open the process to real, responsible lenders?

Dodd and other pocketed senators in the legislature should think about it. The solution to a corrupt monopoly is to break up the monopoly.


Bob Swick said...

This monopoly should end up costing taxpayers at least 10 billion dollars once the mortgage debacle clears out and if this law is enacted. I guess my family will just have to pay more taxes to help support those who lived well above their means. That is why a taxpayer's strike sounds so nice right about now.

Don Pesci said...

The worst part is that nothing in the legislation will prevent the same senario. Fanny and Freddy made risky loans because the loans were underwritten by the feds. The obvious solution to the problem is to withdraw governmental security. If bankers want to write fradulent loans, let'em -- provided the individual banks absorb the debt, not me. And if that menas they go out of business, well and good; that consequence should temper their risks.

Dodd wants a bailout and paper regulations. Crap!

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