Tom Jacobs

The Five Most Effective Bailouts

Your inclusion of Fan and Fred really makes the Too Big To Fail case and thus, should be on your other list. They repeatedly abused the system through lobbying to take on more risk and generate higher remuneration for senior management, often through accounting deception and fraud. They went well beyond their mandate to increase liquidity in the primary mortgage market through providing insurance for successful securitization to buying secondary market securities with huge leverage. Thus they made themselves so big they would require a bailout when they got in trouble. Now, FHA is stepping in where they have backed out and is gaining on them for losses we will all have to make good on. I don't see how you can associate the bailout as a good thing. If AIG and Bear Stearns were bad because they ensured the gains of private individuals over fears of public consequences to their failure, how can you possibly find a different result for Fan and Fred?

Time to Change GSEs' Deal with Treasury

It is like you stepped out of a time machine, completely ignoring Fannie and Fred's lengthy history of using lobbying to castrate any politician who dared suggest that their excessive risk taking and implicit government guarantees put tax payers at risk. Unbelievable.