Rice County Republicans

The mortgage meltdown and the credit crisis are the legacy of dreams fueled by hopes not facts. Certainly one of the biggest differences between the political philosophies of the Republicans and the Democrats is their respective attitudes toward the concept of economic justice.  For a Republican, economic justice is when people are rewarded for good work and innovation by better pay and better job conditions. For a Democrat, economic justice is too often economic equality in spite of differences in ability, drive and creativity.

Visions of a future that are backed by good understandings of markets and economic forces are dreams to be fulfulled. Visions that are fueled by hopes and wishes are fantasies. The impact of this difference can be traced through the history of the dreams that have led us to the economic disaster we are now confronting.  It is critical that every voter understands this failed process and how to prevent it from driving future policy. We hope we can start with you, gentle reader, and that you will help proselytize this information as we move into a troubled future.

The history of this crisis is summarized in an editorial comment at the Investors Business Daily.

How Mortgage Crisis Happened: Good Intentions Paved Dire Path

On the eve of what may be the most important election of our time, the financial catastrophe that many believe will most influence Tuesday’s vote remains only partially covered by the major media. IBD has run many articles and editorials on the mortgage meltdown, including a 7,500-word history from Web magazine American Thinker on Thursday. This timeline is condensed from that article, written by M. Jay Wells. (Click here to read the full version.) It lays out the essential facts of the crisis, which at its heart is a tale of misguided government intervention rather than a failure of free-market capitalism, as argued by presidential candidate Barack Obama.

By M. JAY WELLS | Posted Friday, October 31, 2008 4:20 PM PT (Read the rest, don’t miss the link to the extended version)

One particularly interesting quote of Rep. Barney Frank (D) drives home a critical side issue … we as a society have long refused to directly help people, preferring instead to construct byzantine tax codes and special organizations (Freddie Mac and Fannie Mae) to try and push markets into that business.

Rep. Barney Frank, D-Mass., countered that “the companies [Freddie and Fannie] served a public purpose. They were in the business of lowering the price of mortgage loans.“

Maybe we should stop integrating the two and let businesses be businesses and make these other programs function as open handouts (like other subsidies, crop, oil, wind power, etc.).  Admittedly, such programs would draw the righteous fire of the fiscal conservative, but if they fail we would at least have isolated the problem somewhat. In the giant interconnected credit web we wove over the past 70 years or so, we created far too many institutions that are “too big to fail” and we now reap that bitter harvest. Like monocrop agriculture we have placed all our bets in one credit basket, and when the crop fails, we ALL feel that pain.

I hope we all can take the time to understand this,  because we will have to take the time to explain it to all those decided voters out there. No matter who wins on Tuesday, we must make it our mission to get this basic understanding spread throughout the electorate, because we have no brake on collectivist idealists other than education.