Let's get one thing straight.  The government and its misguided housing policies caused our current financial mess.  And, as a result, the government should help fix it.

That said, exactly "what" should have been fixed, "how" and for "how much" are the right places to focus our attention.  But that doesn't mean we shouldn't make sure everyone knows exactly how we got in this mess.

The origins lie in the Clinton Administration's misguided attempt to raise the percentage of homeowners in America by forcing banks to give loans to people with, shall we say, less than stellar credit, (those "sub-prime" mortgages you keep hearing about).

So how did they do this?  With two government (read: taxpayer) sponsored companies called Fannie Mae and Freddie Mac.  As the Clinton Administration leaned on banks to loosen credit restrictions, (even having Janet Reno threaten lawsuits), Congress forced Fannie and Freddie to buy the sketchy loans as soon as the banks and mortgage companies wrote the loans.  So the lenders made the loans (hey, why turn down a commission?), and everyone made bonus at the end of the year.

So what went wrong?  More bad loans meant more houses being built, which meant more houses being sold and inflating property values - including those houses owned by people with shoddy credit.

All fine and dandy until economic nature takes its course and the people who ordinarily shouldn't have gotten loans did what most people who shouldn't get loans tend to do, failed to pay.  Suddenly, the system is partially resting on a foundation of "bad paper", (now there's a euphemism) - so as soon as the housing market cooled down (hey, they can't loan everybody money!) and property values started to decline, no one really knew (or knows) what all that "bad paper" representing all those sub-prime mortgages on over-inflated property was really worth.

As a result, banks began to tighten up on their credit in order to maintain their cash reserves, so they've got your money if you show up to close your account.  Not good in an economy that has come to be built on credit.

It's an easy money phenomenon that's spread all through our economy for over a decade.  The 1980's, (which the media loved to refer to as "the decade of greed", simply because the economy was good and Ronald Reagan was President), have nothing on the recent years of "bad credit, no credit, no problem".  (Remember those 110% mortgages and stated income loans?).

So where should we go from here?  First, we shouldn't abandon our principles and pass the most expensive bill in history without hearings and, in effect, nationalize failure.  Seems to me that forgetting our principles, (remember thrift?), got us into this mess in the first place.  Instead, we really needed a solution that focuses on free-market principles and reforms the policies and agencies, such as Fannie and Freddie, that caused the problem to begin with.

Just one month from Election Day, it's difficult to imagine that a more high-profile and defining moment will present itself between now and November 4^th.  And the public, especially the half that actually pays taxes, were overwhelmingly against this bailout.

In fact, one thing that was under-reported in all the hand-wringing surrounding the House's initial rejection of the bailout was that the American public got exactly what they wanted.  So, on the rare occasion that government works the way it's supposed to, the media and the markets get upset.  Go figure.

This provided a great political opportunity for Republicans.

They should have stood shoulder to shoulder along with John McCain and announced their own counter-proposal.  One that relied on more free-market style solutions, such as insurance, tax credits, regulatory changes and bridge loans - not a bailout.  This was a big missed opportunity.

How insane is it to dole out hundreds of billions of dollars in a bailout and leave the cause of the problem in place - not to mention waste the momentum that can be used to force reform?  As soon as the check clears, there will be zero will among Democrats to do any real reform.

The point of all this is that the chickens, as Obama's pastor would say, are coming home to roost.  In this case, liberal housing policy chickens.

This is just too rich.  Remember how we were told that the market tanked 777 points the day after the House voted "no" on the bailout this week?  And how they blamed (primarily) House Republicans for killing the deal...and erasing a trillion dollars worth of wealth...  (More than the bailout would have cost us, we were told).

Well, the day after the Senate voted to approve an even more costly version of the bailout, the market has gone down 359 points.

So will we now hear that the Senate's action helped drive the market down?  That the market went down because the bill was so overloaded woth pork??

Yeah, right.

The point is that you cannot and should not do this kind of legislation under the gun, let alone allowing your actions to be dictated by daily tick-tock of the emotion driven stock market.

As I've said before, the bad thing about this financial "crisis" is that it's attracting all the media attention away from the real scandal that they don't want to cover.  That being the crooks at Fannie Mae and Freddie Mac...and their buddies in the Democrat party.

Taxpayers for Truth have a new YouTube video out today which does a good job of comparing this scandal to the ones we were treated with wall-to-wall coverage of, (Enron and Tyco, etc.).  Bottom line, dozens of times larger.

Click the video below, or go here: http://www.youtube.com/watch?v=KQtq77RQRf0

Nothing like have Democrat friends in high places, (like Congress and the media).

Last week, conservatives all across America flooded Congress with the demand that they oppose the bailout, and the House complied.  But now the Senate has "rescued" the bailout...and the pressure is on the House again.

The Senate let conservatives down yesterday...voting 3 to 1 in favor of what has now ballooned to a 451 page bill.  Does anyone seriously believe that, given the rush to do this "now!", and with no hearings at all, that they all know just exactly "what" is in this monstrosity?  Doubtful.  (check out a copy of what they probably haven't read here).

Conservatives have to get in touch with their House members and let them know we want them to VOTE NO on this bailout.

We have to let them know that we want REAL solutions based on FREE-MARKET PRINCIPLES.  That we want REAL REFORM of the policies and agencies (Fannie Mae and Freddie Mac) that caused this problem to begin with.

Let them know that you view any bill that does not have those reforms as a complete waste of tax-payer money...and that you'll hold them accountable at the ballot box in November.

The House email system has been overwhelmed, but you can still get through via fax.

Click here and send your members of Congress a personalized fax message today - before they vote tomorrow.

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Michelle Malkin has a list of the GOP House members (with phone numbers) who voted "no" the first time.  Give them a call.

Just saw this and it was too good not to pass on.  McCain's folks are FINALLY working to turn this thing to their advantage by focusing on the root of the problem that got us into this mess....which brings us right back to the Democrats.

(click image below or the following link: http://www.youtube.com/watch?v=r2RZ0sUcVcE)

Fantastic.  And using Bubba to indict the Democrats in Congress is a nice touch.

Pass it on.

Well, well, well.  Congress refuses to pass a massive tax-payer bailout of Wall Street and politicians and the media lose their minds...  The market goes down 777 points.  The media tells us this is the single worst loss in Wall Street history.  But what they DIDN'T say was 777 points in 2008 ain't the same thing as twenty years ago.

In other words, the market was only down in real terms about 6 1/2 percent...or the 17th "worst" day in market history.

We were told, "See, see!  The market's down by a record...over 1 trillion dollars of wealth was eliminated...more than the bailout would cost...because we didn't pass it!"  Well. 

So what happens the day after the "panic"?  The bargain hunters ruled the roost and the market closed UP almost 500 points.  I wonder if they will tell us that today's gain was the THIRD best ever, (judging by the same standard as they reported yesterday's loss)...or just that it was up 4 1/2 percent.

So will we now hear on the evening news that over 3/4's of a trillion dollars of "wealth" was regained today??

I'm holding my breath.  Call E.M.S.

Conservatives all across America flooded Congress with the demand that they say NO to the $700 billion dollar bailout.

They felt the heat and they rejected the bill.

But conservatives can’t quit now!  We have to let Congress know that any new bill actually fixes the problem that caused the mess to begin with.We have to demand FREE MARKET solutions.

Now we have an opportunity for REAL REFORM that actually abides by conservative principles and addresses the root causes of the problem, (such as privatization of Fannie Mae and Freddie Mac).

By standing up for conservative principles, Republicans on Capitol Hill – and even John McCain – can put themselves on the side of the American people and win credit at the ballot box.

But they have to be pushed.

Tell them you want them to take a stand for conservative, free-market principles.

Contact your members of Congress and let them know how you feel today!

Click here and fill out the form to send a personalized fax to members of Congress.

The House just rejected the proposed $700-plus billion dollar bailout.  Let the recriminations begin.  (Chris Matthews is already acting as though Republicans killed it, despite 40% opposition from the Dems).

The American public was hit over the head with the language of "crisis", (an over-used word in our society, if you ask me) and asked (by people on both sides) to accept THIS "fix" because, if we didn't, the market would go to Hell in a handbasket.  Well, it didn't pass, and the market is only down 6 1/2 percent.  Not a meltdown.

As the old saying goes, there's more than one way to skin a cat. 

I think that we've now got an oppotunity for something much improved.  Something that actually abides by some free-market principles AND addresses some of the root causes of the problem, (meaning some SERIOUS reform of Fanny and Freddie - or even better, privatization of them both).

In a way, the majority of the House Republicans (and even the Dems who opposed it) have saved McCain from having to support this dog in the Senate.  Now he, and they, can propose their own version of a reform/rescue bill...and let the put the Democrats and Obama in a position of opposing it.

Besides, it's plain that the Democrats don't want anything to pass that McCain is "opposed" to, because they don't want him to be able to go out and campaign against it, (since they know the general public is overwhelmingly opposed to a bailout).  Despite all this bi-partisan blather, it's plain that they intended on making it partisan, even in the process of supporting it.  Witness Pelosi's speech on the House floor.

Point being, he has the leverage...if he'll use it...to get something much, much better.  Or at least put them on the record as opposing a real fix.

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More: Michelle Malkin - Hot Air - The Fix - Outside the Beltway -  Right Wing - Powerline

In light of what's going on up in DC at the moment, we've set up a fax campaign to enable you to send a personalized fax to your members of Congress - or even all of them, if you're so inclined.

Avail yourself...and pass the link along to others.

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Tell Congress to say NO to the $700 billion bailout.

Tell Congress to say NO to using TAXPAYER DOLLARS to bail out the Wall Street banks!

Say NO to having our government incentivize failure! 

Say YES to responsibility!  DEMAND accountability!

Tell them they can't shake taxpayers like a money tree!

Let them know we've had enough!

Contact your member of Congress TODAY - before they vote on this bill!

Click Here and fill out the form to send a personalized fax to members of Congress right away! 

David Limbaugh's column today hits the nail on the head re: what's really at the root of the current financial crisis.  (and note I said "financial" and not "economic", but that's another rant)  He points the finger of blame exactly where it belongs...government.

More to the point, governmental meddling in the mortgage markets which was in reality just good old-fashioned social engineering.

Free market conservatives understand that many problems have been caused by government's officious intermeddling in the private sector. The subprime mortgage crisis is no exception.

History has shown that liberal prescriptions don't work, but when they fail, liberals invariably not only deny responsibility for their do-gooder manipulation but also insist on even more government intrusion. Think of it as "the hair of the dog" remedy on steroids. ...

Which brings us back to the current subprime mortgage crisis. When we strip away all the complexity, we discover that social planning largely led to this debacle.

Government politicians and bureaucrats forced lending institutions to make un-creditworthy loans and helped create unnatural demand in the housing market by priming the pump on bad loans. This created an unnatural price bubble in real estate, which was securing these ill-advised loans.

When the bubble inevitably burst, the mortgages secured by the artificially inflated real estate plummeted in value, which left us with an epidemic of grossly under-secured loans.

Facts are stuborn things.  But the fact that government policy - instigated by Bill Clinton and the Democrats - helped start this crisis is one fact that isn't getting a lot of attention.