At first glance, this looks like a bail out of big business, at the expense of the American tax payer. But lets take a much more detailed look at the situation.

Most economic experts (Keynesian college professors etc...) will pertain to the deregulation of the banking industry as the main reason these large investment firms have failed. They will tell you its the lack of regulation in the banking industry that caused this mess.

But tell me, what exactly is/was the Community Reinvestment Act? Am I wrong, or does that sound very much like a government regulation, that calls for an ease of risk management practices, as to act in the interest of non discriminatory lending. Meaning, this act is calling for banks and lenders alike to issue loans to people who ordinarily would have been discriminated based on their credit rating. Because a higher % of people who are credit deficient are of minority status, Jesse Jackson then made it a political issue. With Jackson's help, lending institutions relaxed their lending standards and began issuing high risk mortgages rather than be labeled "racist" or "discriminatory".

Fast forward to 2007, and the sub prime crisis arises out of the loins of the Community Reinvestment Act. All high scale investment banks at the time were heavily leveraged in these investments, which has caused the collapse of ALL main street investment banking (Morgan Stanly and Goldman Sachs are no longer investment institutions but regular old banks).

So I the question: Was it the deregulation or the regulation that help cause the collapse of the US financial sector? Was the CRA not on the same level as over site? Does regulation defined by only disallowance, and deregulation defined by only allowance? I was always taught that regulation was government intervention into the economy, and that deregulation was government not intervening in the economy.

One thing is for certain, the federal government has been intervening with the economy for nearly 100 years, and Keynesian practices have done very little to eliminate recession but very much to devalue or debase our currency.