Enter American Socialism, Stage Left.

"'Emergencies' have always been the pretext on which the safeguards of individual liberty have been eroded." Friedrich August von Hayek

I feel like I am in a dream. Am I seeing what I think I am seeing? How can the ideals of liberty and capitalism be so easily discarded in favor of brief economic stability? How have we become a nation of people that cherishes a non-volatile stock market over free enterprise?
This past week has witnessed a monumental event in American history. Suppossedly not since the days of the Great Depression and FDR's socialist program called the New Deal, has the American economy faced such government intrusiveness. Unfortunately, that is not the focus of those in Washington, the media, or the troubled financial insitutions facing dissolution. Instead, the key theme is 'saving an economy' that is on the precipise of disaster. As the quote from Friedrich Hayek suggests, however, there should be caution in succumbing to the cry for an immediate solution to an emergency. We should be especially cautious about this emergency because it was caused by the very government that wants to spend our money and inherit more power over the economy.
The current crisis, which first showed signs in the Bear Stearns bailout months ago, emerged when GSEs (Government sponsored enterprises) Fannie Mae and Freddie Mac went belly up. Created in the 1930s as a way to help Americans buy a home in the midst of the Great Depression, these two GSEs took on a life of their own in the 1970s thanks to the Carter administrations signing of the Community Reinvestment Act (CRA). The CRA basically used Freddie and Fannie as a social engineering tool by giving mortgages to (primarily) minorities who had little or no credit and little or no chance of paying the bill. The insanity of this deal was overlooked because the government's intentions were good. The road to socialism is paved with good intentions! The lending practices of Fannie and Freddie allowed them to control, eventually, around 40% of US mortgages. What it also did was allow politically connected cronies to use these GSEs as a vote-buying mechanism. "Here is your mortgage Mr and Mrs Gonzales, just remember who helped you: the US government in general and the Democrats in particular!"
The hemorraghing of money out of Freddie and Fannie eventually caught the attention of liberal-minded, affirmative action community organizers (like Barrack Obama) who saw a way to gain community votes and money by forcing the GSEs to sign mortgages. When, in those rare cases, when they did not, the community action groups developed rating systems that could essentially black ball the non-compliant.
Under Bill Clinton, the excessiveness of Freddie and Fannie began to emerge, but was hidden by Democrats in Congress. Clinton has recently said that the problem we are facing today could have been solved back than, but the liberal Democrats stopped any consideration being done and lied about the solvency of these agencies (as recently as 2005 when Barney Frank, who is now one of the principle negotiators, said Frannie and Freddie were excellent organizations).
Now, these mortgages created by Frannie and Freddie were repackaged into invest tools called mortgage backed securities (MBS) that were than bought up by banks, investment firms, etc. Some back had bought so many of these MBS that when Freddie and Fannie collapsed, the effect rippled across the financial waters. Wall Street made the mistake of trusting government run GSEs, agreeing to insane accounting principles sponsored by the government (mark-to-market accounting), and being either unaware or indifferent to the cronies taking millions upon millions out of these companies in pensions and expenses.
To blame Wall Street solely for this is, I sincerely believe, an attempt by the government to shift the blame and grab more power over the economy. Those who used and abused these GSEs are now asking for our money ($2300 in tax increases per person amounting to $700 billion) and our trust. Even President Bush, whom I have always supported and believed in, has betrayed the American people. His eagerness to get a deal signed, despite the implications, reveals to me someone being misled by his Treasury Secretary or not trusting in the power of free enterprise to work out these problems.
IF THIS DEAL PASSES, IT MEANS THE END OF CAPITALISM IN THIS COUNTRY AND THE FULL EMERGENCE OF SOCIALISM!!!! We will have allowed our leaders to trade precious tenets of our Constitutional character for brief financial reprieve. We may breath a sigh of relief, but find our breath taken away when the full power grab of the governments actions are later revealed. I love this country, but I feel if this bailout passes, it means the beginning of the end.