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Monday, September 15: Week in Review

Well you may be surprised to know that Bush was a strong proponent of separating the government from Freddie and Fannie back in 2003 recognizing the inherent risk associated with the quasi backing of the US Gov't for these institutions. (Truly free markets would have required better oversight of risk management without the backing of the US Gov't.) In fact he is the 1st president not to assign members to the board of directors for these organizations since Fannie and Freddie were created in an effort to separate the two. (Gov’t assigned board members were had a fiduciary duty to act in the best interest of shareholders, just as the regular board, rather than as a Gov’t oversight, however lending credence to Gov’t backing.)

Had his insightful plan to create a true separation been successful, we may not be in the mess with our financial institutions that we are now. As it worked out, the situation was far too entrenched to turn around.