RAHN: Surprised by the obvious

Excellant article. It's about time someone starts to counter the Democratic demagoguery that is proliferating. The ties from Fannie and Freddie to the Democrats, from Franklin Raines and Jamie Gorelick (now what other disaster do we associate her name with) to Jim Johnson who was so well thought of by Obama that Obama named him to lead his VP search are prolific. The Democrats created Fannie and Freddie and then turned them into instruments of socialized housing. Now the same Democrats are "surprised"? At what exactly? Are they surprised that in the end someone has to pay for their socialism? Now they have put our entire financial system in jeporady and their "surprise" simply demonstrates their total economic ignorance.

I don't agree that this is an "excellant" article; it seems deliberately slanted to appeal to the WT readership. The current problem goes far beyond the mandates of Congress for excessive lending to high-risk borrowers; it is linked to the $60+ trillion of credit default swaps written against the $7 trillion of U.S. mortgage debt. AIG was nationalized due to its huge involvement in these swaps; the unraveling of AIG's positions could have cratered the entire financial system. Which ex-senator is most responsible for the explosion of these credit default swaps over the last several years? Richard Rahn surely knows the answer--Phil Gramm, sponsor (with Richard Lugar) of the Commodity Futures Modernization Act.