milkchaser

The Five Most Effective Bailouts

> Take the government out of the housing market, in other words,
> and there is no market.

There was no market before FNM/FRE gobbled up market share? There are no banks willing to lend money without a gov't guarantee? Did these GSEs not fail to weed out bad borrowers and put us on the hook for bad loans? Did they not prosper under corrupt management because they had political patrons in Congress?

Government distorts markets.

So the Perpetrators Are Now Our Saviors?

US Sovereign Fund -- that's good. I like that. It would be funny if it weren't true. That kind of money and power invites corruption. I pray it is administered by saints. Not many saints among the politicians (mostly Democrats) listed above. I rather doubt that the Bush administration punished the head of the OFHEO since it was instrumental in getting them the budget in the first place to properly regulate the GSEs. And the shocking thing about that report is that the worst case scenario they imagined was not as bad what actually happened this summer.

Lawrence Lindsey's Angry Fannie/Freddie WSJ Editorial

I worry that Fannie and Freddie will continue to use their incredibly effective lobbying power to protect the interests of their shareholders (and especially the incompetent, overpaid executives) to the detriment of the taxpayers. No doubt those in Congress who carry water for FNM and FRE will put pressure on the new regulator. That regulator may or may not be immune to Congressional pressure, may or may not protect taxpayer interest.

As for this being a Republican problem, well, Fannie and Freddie's protectors can be found in both parties (including the current Majority).