Freddie Mac and Fannie Mae have gone and gotten themselves in big trouble. For those of you who do not follow the business pages, I only wish we were talking about pregnant teen-agers. Fannie and Freddie are the two government-sponsored mortgage companies that help most of us buy homes. Trouble is, they've run themselves into big-time debt -- they've doubled the amount they owe in just the last five years. When I say big-time, try $2 trillion. And guess who's on the hook if these things go under? Congratulations, taxpayers.
This week, Alan Greenspan, the Great Pooh-Bah of the financial world, opined in his usual Delphic style before the Senate Banking Committee, "To fend off possible future systemic difficulties, which we assess as likely if the expansion continues unabated, preventive actions are required sooner rather than later." The Wall Street Journal helpfully translates this as, "Act quickly." Hard to tell with Greenspan: I yield to the Journal's long experience in Greenspan translation, but it could also mean, "Push the panic button now!"
What we have here is the same thing that happened after the famous S&L deregulation in the 1980s -- privatized profit and socialized risk. You may recall that little adventure in deregulation -- the universal panacea according to the right -- cost the taxpayers half a trillion dollars.
<snip>
You know, when a bleeding heart liberal like me has to sit around lecturing a Republican administration on fiscal responsibility, we're in a sorry pass. I watch the entire corporate and financial structure of this country running around raising money like crazy for the re-election of George W. Bush, and I am reminded once more that capitalism will destroy itself if you let it.
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http://www.workingforchange.com/article.cfm?itemid=16505
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