In this excellent column John Berlau of the Competitive Enterprise Institute puts the Bush administration’s proposed solution to the subprime mortgage mess under the microscope and sees nothing but more waste and folly. Berlau draws a parallel between the current situation and that during the Depression, when panicky politicians eager to show that they were busy doing something to fix up the problems caused by previous political meddling enacted all sorts of programs that just made things worse.

The Federal Housing Administration is one of those New Deal blunders. Under a proper reading of the Constitution, there would be no FHA since nothing in that document gives the federal government any authority to do anything in the field of housing. Alas, instead of having the government get out of the market it has done so much to throw into chaos, the politicians are intent on going in further.