Are you angry yet? You ought to be. As I write this, our government is trying to figure out how to “loan” $700 to $900 billion of our dollars to a bunch of Wall Street wonks. They screwed up big time, walked away with personal fortunes while destroying the savings of others, and now we are going to reward them with billions of taxpayer dollars to play with. All the while, trying to get financing for your business has just become a lot harder. As I’ve been preaching for over a year, the fundamentals of our economy are fine. If our government had been doing its job, none of this would have happened.

If you’re one of those people whose eyes gloss over when talking about this stuff, don’t be. The reasons why this happened are not complex at all.

Reason #1: Greed; both on the part of the banks and mortgage companies, and on the part of the individuals who took out the loans. There’s not one person on Wall Street who doesn’t understand that you can’t loan money to people who can’t pay it back. So, why did they do it? Greed.

It’s not hard to figure out that if you can only afford $750 a month for a mortgage payment, buying a bigger house than you can afford with a payment that will balloon in five years to $1,000 a month will lead to a default on the mortgage. So, why did these people take on this debt and buy houses they couldn’t afford? Greed.

Reason #2: The government stuck its nose too far into the investment business, and both parties share equally in the blame. The Clinton administration loosened the reins on the mortgage industry. At the same time, democrats pressured the industry to provide loans to people with lower incomes. That may sound good in theory—let’s make it easier for people to own their own homes—but, you can’t let people borrow money they can’t pay back. As long as the democrats could take credit for getting loans for low-income voters, they were happy, without ever considering the catastrophe that would happen if those loans defaulted by the thousands.

The republicans controlled Congress while this whole thing started. They said and did nothing to alert the American people that a financial mess was brewing. Where was the leadership? Where was the oversight? There was none, from either side, because we have come to a point in history where both political parties are so corrupted by power and money that their prime concerns are manipulating the system to guarantee re-election. The welfare of the country and the citizens is a distant second.

Reason #3: The Bush administration sat by and fiddled while Rome burned. This situation has been coming at us like a slow-moving train for about 10 years. Did the Bush administration do anything to stop it? Where was the treasury secretary? Where was the head of the SEC? Where was the Federal Reserve? Where was the warning? Where were the red flags? Where was the tightening of regulations that would have easily avoided this? Why do these people still have their jobs?

Reason #4: Congress. Both parties. We heard nothing from them while this happened, except for the partisan name-calling after the fact.

I heard an interview with Speaker of the House Nancy Pelosi the other day. She was asked point blank, “Does the Congress have any blame in this situation?” She immediately said, “No. None,” and went into the canned talking points about how this was all the doing of the evil Bush administration. Her answer is obscene. To be so partisan at a time like this, when, of course, the Congress could have done something to stop this, is outrageous. The head of the House Finance Committee, Barney Frank, of Massachusetts, was one of the major proponents of giving mortgages to people who couldn’t pay them back. Where were he and his committee for the last several years? Where was the proposed legislation to curb the bad lending practices? And now, where are the Congressional hearings? Where are the investigations? Why is Congress not looking into this to try and find the culpable parties who stole the retirement money of millions of Americans? If the republicans controlled Congress right now, do you think someone like Barney Frank or Nancy Pelosi wouldn’t be screaming for hearings? So why aren’t the republicans screaming for hearings? Maybe both parties are staying away from the issue because they know full well that there is plenty of culpability on both sides of the aisle.

At this point, even an old libertarian like me has to hold his nose and agree that further interference by the government is probably necessary. A month ago, I was suggesting that instead of giving $900 billion to the greedy SOBs who got us into this mess, we should simply use that money to pay off the mortgages. If the choice is between giving the money to Wall Street crooks or giving to pay off mortgages of low-income Americans who lived beyond their means, why would we give the money it to the millionaires? I was only half kidding.

Now, I’m not so sure. Maybe the best thing would be to get the government out of it altogether and let the market do what it must to correct itself. It could hurt—a lot-but, do we really want to bail out Wall Street, or give Washington so much control over the mortgage industry?

I’m already getting a lot of mail on this. Write to me and add your opinion to the mix. We’ll publish some of your comments in an upcoming issue.