By John Gibson

Lehman Brothers collapse is traced back to Fannie Mae and Freddie Mac, the two big mortgage banks that got a federal bailout a few weeks ago.

Freddie and Fannie used huge lobbying budgets and political contributions to keep regulators off their backs.

A group called the Center for Responsive Politics keeps track of which politicians get Fannie and Freddie political contributions. The top three U.S. senators getting big Fannie and Freddie political bucks were Democrats and No. 2 is Sen. Barack Obama.

Now remember, he's only been in the Senate four years, but he still managed to grab the No. 2 spot ahead of John Kerry — decades in the Senate — and Chris Dodd, who is chairman of the Senate Banking Committee.

Fannie and Freddie have been creations of the congressional Democrats and the Clinton White House, designed to make mortgages available to more people and, as it turns out, some people who couldn't afford them.

Fannie and Freddie have also been places for big Washington Democrats to go to work in the semi-private sector and pocket millions. The Clinton administration's White House Budget Director Franklin Raines ran Fannie and collected $50 million. Jamie Gorelick — Clinton Justice Department official — worked for Fannie and took home $26 million. Big Democrat Jim Johnson, recently on Obama's VP search committee, has hauled in millions from his Fannie Mae CEO job.

Bloomberg [Independent], a billionaire who founded the news agency that bears his name, disagreed, when asked if this was a dark day for the city. He promised he will keep making the investments that make it what he called the best place to work and live.

"I think that it's not a dark day. It is a sad day," Bloomberg said, referring to the Lehman workers who stand to lose their jobs. "The fact is, our financial system cannot continue to stand this game of speculators preying on the weakest firms — and trying to destroy them for profit," he said, calling on the U.S. Securities and Exchange Commission to prevent the "short-selling panic we have seen."

Barack Obama's campaign wasted no time in jumping on John McCain's comment today that while times are "very, very difficult," the "fundamentals" of the economy remain strong in spite of Wall Street's woes.

But as it turns out, McCain has an ally in Mayor Bloomberg.

"I guess I do agree that fundamentally America has an economy that's strong," Bloomberg said during a Blue Room press conference this afternoon in response to the Lehman Brothers bankruptcy, Merrill Lynch sale and teering of AIG.

"America's great strength is its diversity, is its hard work, its good financial statements, its broad capital markets, enormous natural resources," the mayor continued. "And the great American ethic of...We may yell and scream a little bit, but in the end, Americans get on with it. They go out and they find new careers. They start new companies. They want better for their children, even if it means hard work and sacrifice for themselves. Are we without problems? No.

[John K. Matyi] The Fundamentals of our Economy are Strong [John McCain]: Just look at what the 'Fundamentals' McCain speaks of really are: Unemployment, Job creation, and Inflation. All three , plus Individual Worker Production are still considerably better than in any European country or Japan. So should we listen to the Obama 'Party of Doom and Gloom'?

Traditionally it is better in an election cycle if the economy is in a downturn, especially if it is the Republicans who have had control for the last eight years (well really six, don't forget the last two years who had control of Congress). The Democrats get to use the same sound bites they have thrust upon the American people for the last 40 years. Does this mean that Capitalism is dead and we need to follow the tenets of Socialism proposed by Barack Obama (Nationalize American companies/industries, Redistribution of Income because it is fair)? Does this 'new' idea seem like the "Change we need?"

Here is an article written by The Future of Freedom Foundation in 1992 that opens discussion on some of the issues we face today. For the purpose of bringing dialog to our blog I bring you just the highlights of this article. But I suggest you refer to the entire piece

Some Warnings for the East: What Former Socialist Countries Need to Know

by Richard M. Ebeling, November 1992

Lesson 1: Inflation and unemployment are not caused by the free market. The immediate rise in prices that has occurred when price controls have been removed demonstrates just how artificial were the state-established prices under socialism.

Lesson 2: The market economy does not produce an unfair distribution of wealth, and the welfare state does not create social justice.

Lesson 3: Foreign-government credits, subsidized loans, and humanitarian aid will make the transition to a market economy more difficult and will only reinforce the forces opposing change.

Why do many in these former Soviet republics worry that a market economy means inflation and unemployment — that capitalism produces unfair distributions of wealth — that economic development and progress need the support of various forms of governmental foreign aid? Part of the mason is the carry-over of their own socialist thinking of the past. But another and crucial reason is that the Western economists who offer advice and consultations on transitions to a market economy believe these fallacies as well. Both the East as well as the West are still in the ideological grip of "the economics of socialism." And neither the East nor the West seems to have the ability to escape from these dead ideas of the past. —-Professor Ebeling