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Friday, January 28, 2011

Only Democrats Support "Bipartisan" Financial Crisis Inquiry Report

The Financial Crisis Inquiry Report was released by Obama's "bipartisan" group yesterday. Unfortunately, all six Democrats signed it, while none of the four Republicans did. As the WSJ explains, it was basically a Democrat interpretation of what's wrong with corporate America, rather than the perverse incentives created by government intervention.

The report does acknowledge many of the actual causes of the crisis, but its conclusions read like the minutes of an MSNBC production meeting.

Mr. Angelides and his fellow Democrats blame "more than 30 years of deregulation and reliance on self-regulation," a "systemic breakdown in accountability and ethics," "dramatic failures of corporate governance" and "egregious and predatory lending practices" among the key drivers behind the panic.

...he authors also evidently decided they couldn't ignore the government-created mortgage giants Fannie Mae and Fannie Mac, but they dismiss the significance of these and other disastrous federal programs that encouraged multitrillion-dollar investments in residential real estate.

So the two companies that dominated the mortgage market, that bought or insured hundreds of billions in subprime loans, that turbo-charged the mortgage market with trillions in capital from around the world, and that have cost taxpayers more than any other bailed-out bank—they're innocent. Was their attorney Johnnie Cochran?

This is the perfect recipe for Obmanomics - misdiagnose a problem, politicize it, then get the government involved to regulate it.