Fannie, Freddie, and socialized capitalism for the wealthy
Bob Morris @ Aug 26th 2008 10:15 - Category: Credit crisis
Robert Reich
Any day now — perhaps any hour — the plug will be pulled on Fannie Mae and Freddie Mac, and a massive government bailout will ensue. Together, they’ll become the largest government-owned entities in American history, and, once again, taxpayers will pay the bill, which could come to $25 billion or more.
It’s another case of socialized capitalism, folks. The largest, yet. Along with making lots of money for investors and their executives, Fannie and Freddie corrupted our political process.
This time we should make sure we bury socialized capitalism for good.
Meanwhile, the wealthy continue to grow rich off the collapse of F&F. Dealbreaker explains how the auction of $2 billion Freddie notes yesterday could yield a bank that can borrow from the Fed an annualized 17% return with little risk. How cozy.
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