Defenders of Big Government Spawned Mortgage Crisis

The Heritage Foundation today discusses the bankruptcy of the great Wall Street investment bank, Lehman Brothers, and explains how defenders of big government caused the mortgage crisis.  National Review’s The Corner links to an interview with Peter Wallison, a banking expert and White House counsel to President Reagan, who for decades has prophetically warned against the dangers of the government-sponsored mortgage giants Fannie Mae and Freddie Mac, and their use of governmental privileges, at taxpayer expense, to enrich their managers and shareholders.  Fannie and Freddie were protected by liberal lawmakers, even as Fannie engaged in massive accounting fraud and political bullying.  At Instapundit, Professor Glenn Harlan Reynolds discusses an interesting Washington Post story about how Fannie Mae bought off Congress to prevent reform and continue engaging in risky practices that spawned the mortgage crisis.  John Berlau discusses how uninformed reporters have misled the public about the causes of the mortgage crisis.