Here is a splendid column by Fred Thompson on the enormously expensive bailout of the two federal mortgage biggies.
Thompson raises a very good point — if we had stayed with the proper interpretation of the Constitution, Fan, Fred, and other “government sponsored enterprises” would never have come into existence because there is no authority for any branch of the federal government to establish such entities. I’d go further and observe that under the proper reading of the Constitution, there could also be no federal intervention in the housing finance market at all. The Community Reinvestment Act, which is largely responsible for the erosion of the old, safe lending standards, is also unconstitutional. There could never have been a housing bubble and therefore no need for any bailouts if it hadn’t been for meddlers in Congress and Supreme Court justices who thought that it was more important to allow governmental experimentation than to enforce the Constitution’s limits on power.
