For those who want to learn some more about the roots of the financial markets crisis we are experiencing today, check out this editorial from Investors Business Daily. I think it's important to examine the past to prevent a similar crisis in the future.

'Crony' Capitalism Is Root Cause of Fannie and Freddie Troubles

"In the past couple of weeks, as the financial crisis has intensified, a new talking point has emerged from the Democrats in Congress: This is all a "crisis of capitalism," in socialist financier George Soros' phrase, and a failure to regulate our markets sufficiently."

The country is buzzing with news of a potential $700 billion bailout of our financial services sector by the taxpayer. I've received hundreds of calls this week from constituents who share my skepticism about this potential bailout. Most of them have asked how we got into this problem in the first place, and they deserve an answer.

Fox News has does a nice job tracing the steps of this crisis. You'll notice that many of the Congressional leaders responsible back then are now the ones trying to steer us out of this mess. Scary, huh?

The nonpartisan Tax Foundation has made a pretty interesting case that those states with a forced employee/union system not only pay higher taxes than those states with Right to Work laws which protect employees from being fired for refusing to join or pay dues or fees to a union, but household incomes in Right to Work states are also higher.

This year, Americans celebrated their "Tax Freedom Day" on April 23. This is the day when Americans have earned enough money to cover their total federal, state, and local tax bill for the year, on average.

The Tax Foundation and U.S. Census Bureau data have found that in 2008, the average Tax Freedom Day in the 22 states with Right to Work laws was April 18, five days earlier than the national average. For the 28 non-Right to Work states as a group, their Tax Freedom Day came nine days later than the average in Right to Work states.



In addition to a higher tax burden, forced-union states’ cost of living is higher as well. Economist Barry Poulson from the University of Colorado figured that living costs average nearly 18% higher in metro areas in non-Right to Work states than in Right to Work states.

Why?

The National Right to Work Committee says that "where forced dues are legal, union officials use their power to disrupt labor markets, jack up costs, and bankroll regulation-happy, Tax-and-Spend state legislators and governors."

Hopefully the Minnesota state legislature will come to understand the benefits of a Right-to-Work state and come on board for the sake of all Minnesotans.

For more information on the report, click here.

Today, as a Member of the House Financial Services Committee, I'm hearing testimony from the Federal Reserve Chairman Ben Bernanke and Treasury Secretary Henry Paulson regarding the U.S. economy and the potential government bail-out of mortgage lenders Fannie Mae and Freddie Mac.

While the mortgage market is already precariously balanced and this added instability is cause for concern, it is imperative that Congress wait and examine all the facts before jumping in to assist Fannie Mae and Freddie Mac. Far too often, the government over-reacts and involves itself in market matters, preventing the free market from correcting itself and making things much worse.

It is important that before legislation is considered, Washington carefully looks into the financial situation of Fannie and Freddie. We must ensure that our nation’s taxpayers, who are already struggling because of skyrocketing food and gas costs, are not left shouldering an increased burden due to a massive bail-out bill. We must balance that with care that these taxpayers are protected in case this situation leads our economy to take a tumble for the worst. 

You have to give credit where credit is due, and the FBI and the Department of Justice deserve to be recognized for their effort to crack down on mortgage fraud schemes. From March 1 to June 18, 2008, more than 400 defendants were charged for roles in mortgage fraud schemes as part of operation "Malicious Mortgage." The FBI estimates that approximately $1 billion in losses were inflicted by the mortgage fraud schemes employed in these cases.

Most recently, two senior managers of failed Bear Stearns Hedge Funds were indicted yesterday in separate mortgage-related security fraud cases.

Since July 2002, the DOJ has made almost 1,300 corporate fraud convictions, including the convictions of more than 200 chief executive offices and corporate presidents, more than 12 corporate vice presidents, and more than 50 chief financial officers.

These efforts are crucial for the benefit of American homeowners and taxpayers and the housing market. All the agencies involved deserve a great deal of respect for their efforts.

On Wednesday, I appeared on the O'Reilly Factor to discuss the Countrywide Mortgage Scandal involving “VIPs” Senator Chris Dodd (D-CT) and Senator Kent Conrad (D-ND). Take a look.

Having fallen short yesterday, the Democrats have brought H.R. 5749, the so-called "Emergency Extended Unemployment Compensation Act of 2008" back to the floor for a vote. Under their parliamentary maneuver yesterday, the Democrats needed a two-thirds majority to pass the bill yesterday -- it fell 3 votes short. The Democrats are pretty much assured to succeed the second time around using a floor procedure that requires only a simple majority for passage. However, the shortfall yesterday doesn't look good against the looming veto threat from the White House.

This bill is another example of how Democrats take a decent idea that could help desperate Americans who need it the most, and in the process of hijacking it for political gain they ruin it.

Clearly, some states are feeling the unemployment crunch more than others, but this legislation makes no distinction for that. Even states with low unemployment rates would receive the 13-week extension. The White House and Republicans are willing to accept a targeted exception, but the bill as it is now is simply irresponsible.

Furthermore, this bill allows someone with as little as two weeks of work to qualify for up to 52 weeks of unemployment benefits -- a dramatic cut from the 20 weeks currently required by law. H.R. 5749 would increase entitlement spending by $12.8 billion over five years and increase the deficit by $12.2 billion.  However, the bill contains no spending cuts to offset this new spending.

This is something I just had to share with all of you now that I received the pictures. Last week, I got to stop by the New York Stock Exchange and meet with their new CEO, Duncan Neiderauer. Despite the meeting starting in the early AM, this was one of the most interesting and worthwhile experiences I’ve had during my time in Congress. We met for almost an hour to discuss ways to enhance America’s global competitiveness.

Soon I’ll be posting a recent column I sent to the local Chambers and Rotaries in my district that highlights ways to put America’s economy on the fast track to greater prosperity.