The American Spectator

Reader Mail

(Page 6 of 11)

p>The mortgage-back securities participants did a wonderful thing by liquefying mortgages that used to end up in bank vaults. But they went too far this time. And should hang for it. By themselves. br> -- Mark Candon br> Rutland, Vermont /p>

I get sick and tired every time our imperial Federal Government comes running from the darkest recesses of bureaucracy to foist its ideals of nanny statism onto the free market. Where is the government's authority to do such? The market already has many built-in mechanisms to deal with the current mortgage situation and its inherent imbalances. And yes, I call it a "situation;" it is not yet a crisis -- as long as the Government keeps its hands out of the rice bowl.

To begin with, the $200M spent by the Treasury Department to set up a system to "find" these potential foreclosurees is unconstitutional. And more importantly, the Bush/Paulson bailout plan, no matter whether it is voluntary or not, in is direct violation of the Contracts Clause contained in the US Constitution. Specifically, the plan violates Article 1, Section 10, Clause 1.

This would be, as Mr. Berlau relates, a perfect time for some presidential candidates to separate themselves from the crowd and show that when they take the Oath of Office, they do so seriously. To "preserve, protect and defend the Constitution of the United States" is the highest calling any American can commit to, bar none.

Lastly, as a holder of high-risk, mortgage-backed securities, I am incensed at the possibility of receiving "altered" returns because of Federal Government involvement. My preference is to totally keep the bureaucrats and policymakers out of the process. I would rather lose more potential returns due to the machinations of the free market, than to have "not-as-great" loses due to governmental interference.

p>To me, long-term trust in the capitalist system is far more important than any short-term gains provided by a government-sponsored bailout plan. In the end, the bubble will only be prolonged. br> -- Owen H. Carneal br> Yorktown, Virginia /p>

While Mr. Berlau delivers an excellent essay in favor of free market theory and against government intervention, a view I usually agree with, government action by jawboning, legislation or regulation of markets is sometimes necessary. Free markets sometimes have inefficiencies that cause them either not to work properly or even shut down completely. Most notorious of these inefficiencies is monopoly. Monopolies and their cousins, cartels, have to be regulated by government because their pricing mechanisms don't work, are not governed by supply and demand.

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