Uh-oh. The US government has discovered more giant banking firms that are TOO BIG TO FAIL. I have no quarrel with taxpayers stepping in to bail out Fannie Mae and Freddie Mac. In fact the guarantee was always implicit. My problem is that when times were bubbling along, so to speak, Fannie and Freddie executives fought regulatory oversight tooth and nail and claimed that all gains accrued to them. They worked the system to pay themselves monstrous salaries and complained about the evils of government regulation. Conservatives backed them shouting their laissez-faire mantra.
Now that the bubble has popped, however, it turns out that the same people love socialism. Fannie and Freddie must be supported by everyone, they say. We’ve all got to come together to support these important institutions in these desperate times!