The Obama campaign has tried its darnedest to blame John McCain for the ailing economy.  It’s McCain’s free-market, laissez-fairer, philosophy that is to blame for this collapse, goes the argument. 

            A couple of things wrong with this construct, however.

            First, McCain is hardly laissez-faire in his approach to regulation.  In fact, if anything, McCain is a trust-buster, in the tradition of his hero, Teddy Roosevelt.  He has taken on big industries, like tobacco, pharmaceuticals, and big oil. 

            McCain might have some friends who are lobbyists, but that doesn’t mean that he treats them any differently than anybody else.  He goes after big corporations and industries, especially when he believes that they are not putting the country first.

            Second, this crisis is not caused by the free-market.  It is caused by government intrusion and government corruption.

            The collapse of Freddie Mac and Fannie Mae is a perfect example of what happens when quasi-government entities are given a license to steal.  Basically, these government-sponsored entities used their government guarantees to make risky and increasingly expensive bets with tax payer money.  Those bets were made on the proposition that home prices would continually and forever increase at a rate of 10% or more a year.   Read more...