President George W. Bush today will announce a freeze on some subprime mortgage rates in an effort to stop a wave of foreclosures undoing the six-year expansion. Some say Bush’s six year expansion was a manufactured extension of the recession of 2001. As part of the deal the states are expected to help, but experts say it will cost the government if the states help out. Only two days ago a federal appeals court judge said states cannot investigate federally charted banks over shady or questionable mortgage lending.

A federal appeals court on Tuesday upheld a lower court’s 2005 decision that barred the New York attorney general’s office from subpoenaing documents and instituting enforcement actions against national banks as part of an investigation into lending practices. In that case New York wanted to investigate allegations of discrimination. The reason is not important at this point because the ruling effectively blocks any and all subpoenas from any state. The OCC, a federal regulator that should protect us and investigate complaints, is the agency that blocked state efforts.

Many people suspect that Bush fueled his so-called expansion using our home equity and collaterized credit card debt but failed to see the train wreck that would happen. Economists and historians said the amount of debt distortion would be directly proportional the the ensuing crash, and that forecast proved to be correct. Now it is full speed ahead once again. Federal regulators have been well insulated by Tuesday’s court ruling. Federally chartered banks have thus been well insulated. State regulatory action has been shut down.

Now homeowners and communities will be rescued by the same people who caused the problem. Like a thief that tries to give the money back after robbing someone at the ATM machine, somebody might recognize the thief when they see his picture on television. Did we really have an expansion? When did predatory lending push the envelope to become the norm? Wasn’t it about the same time (2005) that the OCC went to court to tell the states to back off? That was the same year Bush signed the new bankruptcy law, and tightened up the ability to file class action suits. Both changes were based on imaginary ‘abuses’.

The scam was so transparent, the warnings so clear, and the setup so blatant that Bush’s imaginary expansion might come to an end this time. The economic impact will continue to trickle down to your neighborhood and mine, even if only as a drop in home values, so perhaps we will be forced to help anyway.

“Politicians want to look like they are doing something while not doing something,” says Joseph Mason, a professor at Drexel University who studies banking regulation and capital markets. “This plan fits that perfectly.”