I’m not in a writing mood today but I hate to leave this page silent so I thought I’d share a few must reads on the Fannie Mae & Freddie Mac bailout with you. First is the Op Ed by John McCain in today’s Wall Street Journal:
We’ll Protect Taxpayers From More Bailouts
By John McCain and Sarah Palin, September 9, 2008
The bailout of Fannie Mae and Freddie Mac is another outrageous, but sadly necessary, step for these two institutions. Given the long-term mismanagement and flawed structure of these two companies, this was the only short-term alternative for ensuring that hard-working Americans have access to affordable mortgages during this difficult economic period.
We are strong advocates for the permanent reform of Fannie and Freddie. For years, Congress failed to act and it is deeply troubling that what we are now seeing is an exercise in crisis management rather than sound planning, and at great cost to taxpayers.
We promise the American people that our administration will be different. We have long records of standing up to special interests and providing the leadership to change government and make it more accountable to the American taxpayer. In our administration, every agency and department will undergo rigorous oversight and review. We will require the highest standards of accounting, reporting and transparency ever demanded in government. Read the rest…
The second is Fred Thompson’s column in the September issue of Townhall Magazine:
The Dangers of Government Guarantees
by Fred Thompson, Townhall.com
I’ll bet it came as a surprise to most folks that the financial stability of the world as we know it depends upon the survival of a couple of outfits called Fannie Mae and Freddie Mac. Yet that’s what the so-called experts are telling us. Moreover, we taxpayers are now being asked to guarantee Fannie and Freddie’s tab, one that could make the $124 billion S&L bailout of the late 1980s look cheap.
So how did we get stuck with this bill? Well, Congress wanted to “do something” about what it saw as a “housing problem.” To them that meant that they should create an even bigger problem.
So Congress passed laws that made it easier for hopeful home-buyers to buy houses … even when they couldn’t afford them. Then the Fed and other regulators helped, in the form of easy money and loose credit standards for mortgages. Read the rest…
And the last is from the Competitive Enterprise Institute‘s OpenMarket Blog:
Are Reporters Financially Illiterate? Fannie and Freddie Are Called “Government-Sponsored Enterprises” for a Reason
Posted by Hans Bader
Right now, the federal government, at a huge cost to taxpayers of perhaps $100 billion, is bailing out the two government-backed mortgage giants, Fannie Mae and Freddie Mac — the so-called GSEs. “GSE” stands for Government-Sponsored Enterprise. But some reporters are financially-illiterate, because if you point out the obvious — that the GSEs are going to cost taxpayers billions — reporters will condescendingly “correct” what you said, by insisting that they are completely “private sector” entities (false) that have yet to cost taxpayers a dime (false). (Back in July, the predicted cost to taxpayers of a bailout was already over $25 billion, according to the Congressional Budget Office. The cost could be up to $300 billion. Moreover, the GSEs already “receive an estimated $10 billion a year in hidden taxpayer subsidies”). Read the rest…
The bottom line on all this seems to be every time congress gets a brilliant idea we get screwed… I mean stuck with the bill.