If you aren't able to separate the message from the messenger, try today's WSJ: Blame Fannie Mae and Congress For the Credit MessBy
CHARLES W. CALOMIRIS and
PETER J. WALLISONhttp://online.wsj.com/article/SB122212948811465427.htmlAnd consider this:"Now the Democrats are blaming the financial crisis on
"deregulation." This is a canard. There has indeed been deregulation in
our economy -- in long-distance telephone rates, airline fares,
securities brokerage and trucking, to name just a few -- and this has
produced much innovation and lower consumer prices. But the primary
"deregulation" in the financial world in the last 30 years permitted
banks to diversify their risks geographically and across different
products, which is one of the things that has kept banks relatively
stable in this storm.
As a result, U.S. commercial banks have been able to attract more
than $100 billion of new capital in the past year to replace most of
their subprime-related write-downs. Deregulation of branching
restrictions and limitations on bank product offerings also made
possible bank acquisition of Bear Stearns and Merrill Lynch, saving
billions in likely resolution costs for taxpayers.
If the Democrats had let the 2005 legislation come to a vote, the
huge growth in the subprime and Alt-A loan portfolios of Fannie and
Freddie could not have occurred, and the scale of the financial
meltdown would have been substantially less. The same politicians who
today decry the lack of intervention to stop excess risk taking in
2005-2006 were the ones who blocked the only legislative effort that could have stopped it."