I’ll be honest, I don’t understand all the particulars of the credit crisis, and I have mixed feelings on the bailout bill. On one hand I resent that we are being asked to bail out those who made bad decisions. I resent that we are being asked to bail out home owners that purchased homes that they couldn’t afford, and I resent that we are being asked to fork over the money for this bail out when it was all avoidable if only government hadn’t stuck its nose where it didn’t belong. On the other hand, the effects on the nation may simply be too much to bear if we don’t do something.

The IBD editorial board asks a good question in their editorial yesterday; should congress be perp-walked over the Fannie Mae and Freddie Mac scandal?

Everyone remembers the prosecution of CEOs like Ken Lay of ENRON and Bernie Ebbers of Worldcom back in the early 2000’s. Their were 50 major fraud prosecutions from March of 2002 to August of 2003. Some 90 corporate officers were involved. Many of these prosecutions were deserved, but some were the result of overzealous prosecution.

Now, a grand jury in New York has an opportunity to go after the perpetrators of one of the biggest financial scandals history. Here’s how IBD lays out the magnitude of the situation.

Here’s how James B. Lockhart III, head of the Office of Federal Housing Enterprise Oversight, described the two companies back in 2006, before the meltdown occurred:

“The result of (Fannie’s and Freddie’s) rapid growth unconstrained by market forces and a weak regulator was years of mismanagement, flagrant earnings manipulation, and systems-and-controls problems. Managements of both companies were forced out, earnings were misstated by an estimated $16 billion, fines exceeding one-half billion dollars were imposed, and remedial costs will exceed $2 billion.”

Yet Congress did nothing. Fannie and Freddie continued to enjoy a virtual monopoly of the housing finance market, holding nearly half the nation’s $12 trillion in mortgage assets in 2007.

Oh yeah, IBD names names. Contrary to Nancy Pelosi’s claims, it’s not the Bush administration that’s at fault though.

And what happened to Fannie’s and Freddie’s top executives, almost all with deep ties to the Democratic Party? Did they get perp-walked to prison like WorldCom’s Bernie Ebbers, Tyco’s Dennis Koslowski, Adelphia’s John Rigas, ImClone’s Sam Waksal, or any of the others who did time for corporate misdeeds in the early 2000s?

No. Jim Johnson, former Walter Mondale aide, became head of Barack Obama’s vice presidential search committee. Franklin Raines, who headed Fannie from 1998 to 2004, the years of its worst excesses, pocketed nearly $100 million in pay and bonuses from Fannie. He, too, became an adviser to Obama.

Other Fannie-Freddie alumni did equally well. Rep. Rahm Emanuel has been front and center in crafting a new rescue bill. Ex-Clinton Justice official Jamie Gorelick careens from career catastrophe to catastrophe, and still gets top jobs. It pays to have ties.

Meanwhile, as previously documented, Rep. Barney Frank and Sen. Chris Dodd repeatedly thwarted reforms. Yet today they stand front-and-center as Democrats try to “fix” a problem they created.

As such, any investigation into Fannie and Freddie must include Congress, both current and past.

There’s lots of evidence that the two mortgage giants had become little more than taxpayer-guaranteed front companies for Democrats, who used them to reward supporters with cheap loans and to provide jobs for out-of-work politicians.

If — as I suspect — some sort of bailout bill is passed and signed by the President this week or early next week one of the issues that I would like to see addressed in the bill are the root causes of this mess. Specifically the CRA — a law pushed through by President Jimmy Carter in 1977, as well as the changes to that law that were made by Democrats during the Clinton administration that supercharged the crisis. If we don’t address the root causes of the crisis we’ll be right back in this same situation again.