Wall Street: A Democratic Joint

Follow the Money: If you think Wall Street gives overwhelmingly to the GOP you're wrong. Democrats have been raking in investment banker money almost 2-1 compared to Republicans. Merrill Lynch was the only big firm whose employees gave more to Republicans than Democrats. Michael Franc provides an excellent summary over at National Review.

Blame Liberalism: Democrats caused our current financial calamity. I know, the liberal press echoes the liberal politicians who bawl that it's the fault of those mean, deregulating Republicans. Noel Sheppard at Newsbusters gives us the real reason why: Jimmy Carter and a Democratic congress passed laws that forced lending institutions to loan money to people who couldn't pay it back. These stupid policies were egged on by the Clinton and current Bush Administrations.

It's Not Bush's Fault. It's Barny Frank's Fault. In President Bush's defense, he tried to overhaul Fannie Mae and Freddie Mac back in 2003, but was rebuffed by Democrats (and some Republicans) in congress. Here's the money quote from Barney Frank:

''These two entities -- Fannie Mae and Freddie Mac -- are not facing any kind of financial crisis,'' said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. ''The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.''

John McCain Saw This Coming And Tried To Stop It. He cosponsored legislation (blocked by Democrats) that would have reformed reformed Freddie and Fannie. Here's a McCain quote from 2005:

I join as a cosponsor of the Federal Housing Enterprise Regulatory Reform Act of 2005, S. 190, ... If Congress does not act, American taxpayers will continue to be exposed to the enormous risk that Fannie Mae and Freddie Mac pose to the housing market, the overall financial system, and the economy as a whole.

Capitalism didn't cause this crisis; government intervention in private markets did. Kevin Hassett at Bloomberg.com has written what I think is the best summary on why this is the Democrats' fault.

Bipartisan Sleaze. Wall Street became a giant hog wallow where Democrat and Republican, politician and banker, rooted cheek by jowl in piles of government and private sector money. Even President Bush's overhaul proposal wasn't to sell off Fannie and Freddie, but to create another bureaucracy to oversee the current bureaucracies.

Bipartisan Corruption. Liberals and conservatives must understand this. Our political system is corrupt. And it's a bipartisan corruption: Democrats ran Fannie and Freddie and Republicans lobbied for them while both parties lapped up bribes disguised as political contributions. The only way we can keep sleazy politicians from doing stupid things with our money is to take the money away. Government has no business in business, and business has no business in government. Take away the Federal safety nets for gamblers, and sanity will return to the markets.

We Must Stop Them Before They Breed Again! The regulatory firewall that is needed is between Wall Street and Washington, before their amorous cavortings spawn another monster.