United Liberty

Guard your wallet, negotiators in Congress have reached an agreement:

Congressional leaders and the Bush administration agreed Sunday on the main elements of a $700 billion bailout for the financial industry, paving the way for swift enactment of the largest government intervention in markets since the Great Depression.

Negotiators sought to iron out the final shape of the legislation and it still had to be reviewed by House Republicans, whose fierce opposition to a federal rescue nearly torpedoed an emerging bipartisan pact late in the week. Officials in both parties said they hoped for a House vote Monday.

You can read more about the proposal here.

I don’t buy the “sky is falling” attitude of congressional leaders. Intervention always makes things worse. The easy money policy of the Federal Reserve and the Community Reinvestment Act, which Rep. Ron Paul has partly blamed for the crisis.

I’ve seen much made of the money paid to adviser of Sen. John McCain (R-AZ) from Freddie Mac and Fannie Mae, but almost nothing about the campaign donations by PACs and individuals supporting the interests of the housing behemoths to Sen. Barack Obama (D-IL) and Sen. Chris Dodd (D-CT), one of the principal negotiators of this deal.

Rep. Barney Frank (D-MA), who has also received Fannie Mae and Freddie Mac money, told The New York Times in 2003:

‘These two entities — Fannie Mae and Freddie Mac — are not facing any kind of financial crisis,” said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. ”The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.”

Representative Melvin L. Watt, Democrat of North Carolina, agreed.

”I don’t see much other than a shell game going on here, moving something from one agency to another and in the process weakening the bargaining power of poorer families and their ability to get affordable housing,” Mr. Watt said.

Watt has also taken money from Freddie Mac and Fannie Mae.

Taxpayers are now on the hook for $5 trillion in mortgages. No one knows how many of the mortgages are bad. Even the Bush Administration admits that they just made up the $700 billion figure. No one is making sure the interests of taxpayers are protected and it is almost guaranteed that we’ll never see any of this money again.