Obama blathers away about how the government must “rein in” businesses that are “too big to fail.” The crucial point he fails to grasp is that if it weren’t for governmental actions creating moral hazard (such as the guarantees for Fannie Mae and Freddie Mac), institutions of all sizes would manage risk far more sensibly.
Econ professor William Anderson covers this latest burst if foolishness from the Oval Office in this Freeman column.
We could add that there is nothing in the Constitution that permits government bailouts of businesses of any size, for any reason. Obama boasts that he used to teach constitutional law, but he has a really pathetic understanding of the Constitution.
