Spitzer's right. Believe me, much of what is happening in the bond market world in the insurance of bonds is about Darwin and laissez-faire and Ayn Rand. It is about letting the marketplace rule, and of letting capitalism run wild and roughshod. That's why I was so glad to hear Eliot Spitzer say as much on CNBC this morning.
Sure, many of the people who took these mortgages shouldn't have. But we have known since time began that you can fool people who aren't clever and who are greedy, so you have to protect them from themselves.
That's not what we did. Instead, we figured that the marketplace will take care of everything, that capitalism produces the best result.
Well, it doesn't. Not at all. Today there will be congressional hearings about the back end of the mortgage crisis, the shameless way that AAA ratings were bought and kept by those who knew better and now are still pretending to know better -- the monolines, none of which has enough capital on hand for the mission and all of which continue to say they do. The Gang of Four (Ambac (NYSE: ABK) (Cramer's Take), MBIA (NYSE: MBI) (Cramer's Take), MGIC (NYSE: MTG) (Cramer's Take) and PMI (NYSE: PMI) (Cramer's Take)) has been and will be where the next 1,000 Dow points stem from, either because their problems are so big the Fed has to cut or because their problems are so big and the Fed doesn't see they have to cut.
But we must never forget that it was the laissez-faire policies of Alan Greenspan and Ben Bernanke that are at the root of the mortgage problem. They were philosophers. Failed philosophers.
I gave a speech at Bucknell recently outlining some of the thoughts that Eliot touched on today. I said that Bernanke and Greenspan would have let the market work its magic as the Irish died in the potato famine.
Yeah, they are just heartless, survival-of-the-fittest ideologues in the end, pretending to be gentle capitalists tinkering with a great financial system for the benefit of all.
Jim Cramer is a director and co-founder of TheStreet.com. He contributes daily market commentary for TheStreet.com's sites and serves as an adviser to the company's CEO. At the time of publication, Cramer had no positions in the stocks mentioned.