The Louisville Courier Journal’s complacency with the bankruptcy and government takeover of mortgage behemoths Fannie Mae and Freddie Mac should tell you everything you need to know:
“The federal government did what it had to do over the weekend when it took over the troubled Fannie Mae and Freddie Mac lending institutions…But doing nothing was not an option. As costly as this remedy is, doing nothing could have cost us even more in the future.”
Color me skeptical. What we have done by bailing out these quasi-government agencies is to allow bureaucrats to pick winners and losers. Why is it preferable to allow people and entities who have overpaid for houses to keep them with subsidies from others when those others might otherwise profit from buying those houses for market prices?
This is what we do on the state level when we give tax money taken from existing employers to entice new employers to set up shop in Kentucky. Where is the evidence that this money is well-spent? And why do we think this works better when applied selectively than it would if we just lowered taxes for everyone?
The gathering storm of bank failures should now turn attention to the government backing for reckless lending practices through the Federal Deposit Insurance Corporation. The FDIC should be shut down immediately, before that gets any more expensive for taxpayers.
And in Kentucky, we should stop offering tax money to recruit businesses to come into the state and compete with those who are already here.