September 7, 2008

(WASHINGTON, DC) - Once again, thanks to good-intentioned, caring, one-size-fits-all government tinkering with the money process, the little guy is going to be screwed, again.

FNMA (Fannie Mae) and FHLMC (Freddie Mac), two really bad ideas from the Roosevelt administration, compounded by Lyndon Johnson, were supposed to make housing more affordable and help save the truly poor from having their houses taken from them. While they rarely did the former, they never did the latter. It took special programs from visionaries like Jack Kemp to make such programs, but they were quickly coopted by the Carter Administration. The only thing they ever managed to do was save the butts of the big bankers - no little people were ever helped.

You may not know this, but the Progressives are the big buddies of big everything. That's because global businesses know they can bribe their way into a fascist stronghold. Yeah, they'll be regulated and taxed a lot, but the very highest guys will always survive, even in a supremely socialist nation. Look at Italy in the 1930's. Look at the relationship our South Carolina Progressiveic congresspersons have always had to banks. Does the name "Patterson" ring any bells?

And let's understand something - banks, by their very nature, are unstable institutions. They're allowed to lend seven times more than they actually have on hand. America allows it, because it's the way you grow money - as debtors pay back, the actual existing cash flow of the country increases. But, like it or not, the system is an inverted pyramid, which is inherently unstable. A warm smile and a friendly handshake can only go so far.

That's why, when banks make bad loans, everybody suffers. Roosevelt's system was supposed to have fixed that. Instead, it led only to the helping of the ones at the very top. It's what always happens in societies that depend on taking from the producers and giving it to the non-producers.

What do you do? How do you fix it?

Whatever we do, it should be slow. Let's get government out of the money business. Slowly, very slowly, we should begin replacing all bank programs with insurance for depositors only. No more bailing out for bad loans. No more federal guarantees for loans. That should be balanced with a borrower's right to sue a bank for even the slightest misrepresentation.

Eventually, all banks should never again be mixed with savings and loans. They should be holding and exchange companies only. No more credit cards - only debit cards. Banks should never again be tempted to extend credit for any reason.

Savings and loans are a risky business and should be left alone to loan and promote savings, make and maintain credit cards, and create temporary fiat monies, but should be no part, at all, of bank holding and exchange companies. People should understand that when they place their money with money lenders, they are risking their capital. They should also know that they can sue, completely, the institutions for bad economic decisions and demand complete restitution.

The honest truth is that the combining of the money palaces occurred during Republican administrations and was sold as a new kind of political freedom. What it actually was, was more government meddling in an already confused marketplace - a sure recipe for disaster. And now, we have it.

Now that the economy is in a nose-dive because of extortion-prices on gasoline, thanks to the econonuts and the morons who follow them, people have shifted money to that tank of gas for $75 and can only afford to pay $425 of their $500 house payment. Fannie Mae and Freddie Mac have been cuckholded. Government forced it, and offers no real solution for the little guy (either Progs or Repubs).

The common stockholders are now the possessors of worthless stock, while the bigwigs and big funds get refunded. We are going to actually walk away from this thing saying that we've fixed it. We haven't. The seeds of ruin are deep and are still germinating. It really won't be fixed when (and if) they separate banks and S&Ls. We have got to stop trying to make this socialist nightmare work.

It's time to back away from the nanny state. Granted, one small step at a time, but even Mao Tse Tung knew that "the journey of a thousand miles starts with the first step."

- Dick Anderson