Lesson From The Bailout (Bailout Round-up V)
Dr. Walter E. Williams, economics professor at George Mason University, writes in his Townhall.com column yesterday of “lessons from the bailout.” The following, in my opinion, however, is lesson #1:
“The financial collapse of Fannie Mae and Freddie Mac is not a failure of the free market because lending institutions in a free market would not have taken on the high-risk loans. They were forced to by the heavy hand of government. The solution is not a taxpayer-financed bailout. The solution is to let them fail and allow the people who invested in them, as well as the people who purchased homes they couldn't afford, suffer the losses. Of course that takes a level of political courage that is in short supply.”
In short supply? Indeed, even in very short supply!