Andrew McCarthy’s column on Lehman Brothers, Bear Stearns, Fannie Mae, and Freddie Mac is a must read. The punch line:
Treasury Secretary Henry Paulson is to be commended for telling Lehman the gravy train has left the station. Back-stopping recklessness leads only to more recklessness, while punishing prudent actors who don’t buy the home they can’t afford, don’t lend to the dodgy debtor, and don’t create new commercial paper that bundles these dubious transactions for mega-trading.
But now that the adults have finally decided it’s time to pay the piper, we need to get a look at the actual bill. Put Fannie and Freddie on the books … and let’s see if the Pelosi Democrats will give the economy-wrecking practices of their beloved private/public partnerships half the scrutiny they’ve reserved for the firing of U.S. attorneys.
One thing he points out is the Federal Government is assuming Fannie and Freddie’s $5 trillion in liabilities (that’s over half the national debt), without feeling the need to put it on the Federal budget. Enron pales in comparison.
(Via the Corner.)
Speaking of which, LGF notes that Barack Obama is the second largest recipient of Fannie and Freddie’s contributions over the last ten years, despite having been in office for less than four!
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