Concern's Journal: Capitalism for the Poor, Socialism for the Rich

Today Fannie and Freddie are being bailed out. A Sunday, no less. I can hear the chuckling all the way from Greenwich CT, and the D.C. and Dallas suburbs.

I quote the associated press, in wondering why these two titans of mortgage-backed securities have come to need help from you, the taxpayer:

"How could you look at an enormous rise in prices and not think there was a potential for them to fall?" said Christopher Thornberg, a principal with Beacon Economics in Los Angeles.

Gee, good question Yogi. How about because it's actually kind of fun to take risks when there is no actual downside?

Apparently, everybody knew the government was going to bail them out if they ever got in trouble.

Pretty good racket. How can I get in? LOL.

I can't come here and argue that we shouldn't bail them out. Only that they never should have existed in the first place.

Did they really do something the market couldn't have done for itself? And suppose they really did. Since it was apparently an open secret all along that they represented the US Treasury, why were they not simply wholly a part of the government? You know, in good times and in bad?

Ah, but if they were a government agency, then those guys in Greenwich CT, and in VA and TX would have to find a different job, rather than robbing on your tax money (both paid and prospective).

But lest you all think I'm just here to bring everyone down, I do have one good suggestion. Why don't we all write to our senators and ask them how long it will be before the people involved in both running and regulating Fannie Mae and Freddie Mac will be in prison?

I mean, I assume even though they stole billions of dollars from us, rather than a car stereo, they're still thieves, right? And I think they haven't even gone into hiding yet.

I just want to try to instill some discipline lest we have an even wilder, more unruly orgy of treasury looting.

Not a bad idea

[Qzukk]

I've got a Senator on the block, both he and his main competitor would probably love to send me a form letter about how they can't be bothered to read my mail.

I'd send one to my rep, but he'd probably send me a form letter telling me that I'm not Republican enough to be bothered to send me a form letter about my mail, but here's a list of 527s that I can donate to until I reach OT Level 5 or something. It's not like he's ever had a serious challenge to his seat.

I've posted this before, and I still think it's the best idea: any bank bailout must be in the form of a loan to be paid back with interest. And to ensure that it DOES get paid back, from the point they take the cash until the point the last penny is paid back, they cannot foreclose on a single mortgage. This makes it in their best interest to renegotiate new contracts with their tardy customers in order to maintain cash flow to make their own loan payments. And of course it's in the homeowners' interest to keep paying, because at some point the company WILL get their loan paid off and then the eviction squad will come a-knockin.

For non-bank entities that bet their farm on "exotic derivatives" tough shit, no bailout for you. You pays your nickel and you takes your chances.