So the United States is going to nationalize Fannie and Freddie and stick the taxpayer with the bill for their toxic paper. So much for deregulation.
Actually, deregulation was a sham to begin with. All that happened is a benign regulator, the government, was exchanged for the brutal regulator, the market, i.e., if you screw up, you fail.
Then, in 1984, the Continental Illinois National Bank & Trust Company made one too many bad loans and the concept of "too big to fail"- was born. Taxpayers bailed the bank out and deregulation became a joke. This was quickly followed by the savings and loan bailout, the Bear Sterns bailout, and now the Fannie/Freddie bailout.
And this one is going to be a whopper! Between them, Fannie and Freddie guarantee $5 trillion in mortgage-backed securities (a trillion is 10 to the twelfth power or a one with twelve zeroes following it).
Maybe the bailout is necessary, maybe it isn't. But, two things are certain: first, someone is going to collect some very rich fees for handling the nuts and bolts of the two giants' nationalization, and secondly, ideologues and economists will continue to tout the efficacy of an unregulated free market.
Once again, theology will trump reason.
To paraphrase Michael Ledeen, every fifty or sixty years the American public has got to grab Big Business by the throat, slam it against a wall and teach it some manners.
It's time.
If our tax dollars are going to be used to bail out corporate ineptitude, then the public has the right to demand a major Structural Adjustment Program (SAP), beginning with the passage of a brand, spanking new Glass-Siegel Act that will make the old one look like a neoliberal dream.
Just as you don't put the fox in charge of the chicken coop, you don't let CEOs regulate themselves.
Speaking of CEOs, it's about time we saw a few of them in orange jumpsuits. Were a street hustler in Harlem to try the same Ponzi scam they did, he'd be looking at some hard time.
Of course, it will never happen. Both the White House and Congress are corporate employees, and you sure as hell can't fire your boss.
As long as America's one-party system continues to thrive, our financiers can be confidant that as long as they are "too big to fail,"- they can do any damn thing they please. Only the most egregious violators are ever punished. But, in or out of jail, the public is still stiffed.
